Confidence in the property industry has reached record levels, increasing eight points since the same time last year to a new high of 140 points.
According to the Property Council/ANZ Property Industry Confidence Index, every Australian market is in positive territory, with capital values expected to rise and construction activity set to increase.
“This is great news for the hundreds of thousands of Australians working in the property industry,” says Property Council of Australia chief executive Peter Verwer.
“Positive expectations about house price growth and significant expected increases in residential construction activity across the nation are driving a strong upturn in confidence for the property industry.
“The industry has been buoyed by strong staffing level increases across the nation over the last three months and is confident of further increases in staff hiring over the next 12 months,” says Verwer.
Verwer says the answer to boost economic growth and create jobs is a clear answer.
“The message from Australia’s largest business confidence survey is that it is property and construction, the industry that employs more people and contributes more to GDP than any other, that will lead the way to future prosperity.
“This is more than a bounce due to political events – this is Australia’s largest industry powering back up after a long period of consolidation,” says Verwer.
But outside the property sector, ANZ chief economist Warren Hogan says the improvement in business sentiment has been tentative and the near-term outlook for the Australian economy remains subdued.
“Mining investment is winding down from unsustainable highs and the public sector will likely detract from growth in the near-term.
“Hence, despite a solid recovery in the property sector, ANZ expects that Australia will experience below-trend growth over the next 12-18 months.
“For monetary policy, this suggests that we are in for an extended period of low interest rates. The future path of the AUD, however, will remain an important consideration for the RBA,” concluded Verwer.
This article first appeared on Property Observer.