AUSTRALIAN PROPERTYAUSTRALIAN ECONOMIC UPDATE
PROPERTY INDUSTRY CONFIDENCE INCREASES ON RBA RATE CUTS ANDMORE STABLE ECONOMIC OUTLOOK
17 JANUARY 2013CONTRIBUTORS
David CanningtonSenior Property Analyst
+61 3 8655 9036David.Cannington@anz.com
Paul BraddickHead of PropertyResearch
+61 3 8655 9022Paul.Braddick@anz.com
Property industry confidence strengthened in the March quarter, increasing on amore stable outlook for the global and Australian economy, compared to theprevious quarter. Looking ahead, the mining investment boom is approaching apeak and the Australian economy will become increasingly dependent on acyclical rebound in non-mining investment in the years ahead, with the propertysector a key driver of this transition.
The latest Property Council of Australia-ANZ Property Industry ConfidenceSurvey reveals the improved economic outlook, combined with further RBA ratecuts, are having a positive impact on the property sector outlook. The PropertyCouncil of Australia-ANZ property industry confidence index increased by 5pts inthe March quarter (107 compared to 102 in the December quarter), following a4pt
in the December quarter.
The March quarter survey polled more than 3,000 property industryprofessionals – the most comprehensive survey of Australian property industryviews – and revealed stronger expectations for house price growth and positiveexpectations for property construction. This result reflects recent growth inbuilding approvals and tight market demand/supply fundamentals in bothcommercial and residential property.
Property industry confidence increased in all states and territories exceptTasmania and the ACT in the March quarter. The states with the greatestexposure to the mining industry (WA and the NT) continued to report thehighest confidence in level terms, followed by NSW. Victoria, Tasmania and theACT were the only states/territories to report ‘negative’ confidence.
FIGURE 1. PROPERTY INDUSTRY CONFIDENCE STRENGTHENS
Property industry confidence index*
I n d e x
Dec qtr 2011Mar qtr 2012Jun qtr 2012Sep qtr 2012Dec qtr 2012Mar qtr 2013
* Data for December 2011 and March 2012 show expectations for "the next quarter". Data since June quarter show expectations for "the next 12 months".
Sources: Property Council of Australia, ANZ