- The results have led to calls for reforms
- NSW still has more cranes in the sky than anywhere else globally
- Biggest single issue remains housing supply and affordability
The findings have led to calls for governments to press on with reforms that will provide certainty to the industry.
“It comes as no surprise that confidence has taken a hit given the current global factors affecting the market from viruses, inflation, energy and materials costs to labour shortages,” said Luke Achterstraat, Property Council NSW Executive Director.
Mr Achterstraat noted that although there was a confidence dip, NSW has more cranes in the sky than anywhere else globally.
“Despite the external challenges we are facing as a state.. we are pushing on,” he said.
“It was pleasing to see the NSW Government proceed with Stage 2 of the Parramatta Light Rail and commit to fast-rail from Sydney to the Hunter and Central Coast.”
The confidence index fell from 138 to 112 in NSW – which is still positive neutral, as 100 is neutral.
Nationally, confidence fell by 19 points, but is 118 overall.
ANZ/Property Council Survey
As shown in the above chart, dips were shown across the board, however, none of the jurisdictions is below neutral.
Ken Morrison, Property Council of Australia Chief Executive, said the decline in confidence is caused by a range of large external factors such as inflation, skill shortages and disrupted supply chains.
“What we’re seeing in this survey is a steep confidence dip in the broader outlook, yet specific firms remaining optimistic about their own business conditions,” Mr Morrison said.
“There is no doubt that the lingering effects of COVID, inflationary pressures and interest rate implications, energy and staffing shortages as well as global geopolitical issues, have left a dent in confidence, and that comes as little surprise.
“However, when asked to reflect on their own business plans, respondents felt well-positioned to withstand those headwinds, which is why, combined with historic low unemployment figures, confidence overall is still in positive territory,” he said.
Felicity Emmett, ANZ Senior Economist, said that property sentiment had taken a hit following the recent rate rises.
“The prospect of sharply higher interest rates, the turn in the global outlook, and talk of a US recession have all taken their toll on the economic outlook,” Ms Emmett said.
“Firms are now the most downbeat about the economy than they’ve ever been outside of the worst of the pandemic in 2020, and are particularly negative about the availability of debt finance.
“This pessimism seems overdone given how optimistic firms are about their own work schedule and staffing levels,” she said.
Noting the survey results, Mr Achterstraat said it is time to lead a productivity agenda that supports the construction sector.
“All options need to be considered by government including measures to boost workforce participation in construction including women and indigenous people, regulatory certainty and appropriate tax settings.”
Critical issue for State Government
The most critical issue for state governments, by far, is housing supply and affordability, which has been steadily increasing among respondents over the past year.
“Consistent with previous surveys, housing supply remains the most pressing critical issue for governments to solve at both the federal and state levels.
“Knowing this, our government should continue to push forward with measures that increase housing supply and confidence throughout the state.
“The industry has a positive view of the NSW Government, so it is essential this goodwill is not squandered but met with action by government.”