Residential underpins falter in industry confidence: Property Council

Building new homes around the country has helped underpin property industry confidence as retail and hotel sentiment declined ahead of the holiday period.

Property market confidence has faltered just as the housing affordability crisis comes under the political spotlight, with the industry calling for greater planning reforms to meet ­delivery targets.

Victoria suffered a significant blow to confidence over the September quarter, falling back to neutral territory, according to the latest Property Council/ANZ survey.

National confidence levels are at their lowest levels since the pandemic stimulus began to flow through the economy in the latter half of 2020, with South Australia, Western Australia and NSW also declining.

However, it was a different story in the ACT, where the industry is positive due to forward work and staffing expectations, which have boosted confidence.

Property Council of Australia chief executive Mike Zorbas said “housing obviously remains a top priority for the sector”.

“Even though there's a whole-mixed bag of drivers out there, that very strong central ­pillar of the economy, population growth, is what is sustaining that property industry confidence,” he said.

“Construction activity expectations are generally quite positive across asset classes, with the exception of retail and office … those have slightly dipped into the negative territory, but, in many ways, expectations around office are realistic.”

Property Council of Australia boss Mike Zorbas.

The survey of the property industry was conducted prior to the Andrews government’s housing statement last week, which committed to deliver 80,000 new homes across the state each year over the coming decade. It followed the Greens supporting the Albanese government’s Housing Australia ­Future Fund, which pledges 1.2m new homes within five years from 2024, alongside additional social and ­affordable dwellings.

Mr Zorbas believes the state policy will buoy confidence, particularly after the national cabinet committed to reviewing planning regimes.

While housing affordability remains the biggest issue for the industry and government to tackle, planning reforms is becoming an increasingly pressing issue, according to the survey results.

“We’ve never had anything approaching a carrot from the feds to get housing right and delivered. Now we’ve got that carrot on the table, we’ve got those targets. It’s almost a national endeavour now to get to a million by 2029, and it really does seem as though everyone is signing up to that,” Mr Zorbas said.

The highest confidence remained in the retirement living sector, which jumped to the highest level since 2021. Industrial and residential continued to rebound from lows of the past 12 months, while retail and hotel confidence declined ahead of the crucial holiday period.