Property and construction industry sentiment in Western Australia has taken a step back, although is still amongst the highest in the country, new research shows.
The Property Council of Australia-ANZ Property Industry Confidence Survey WA index score fell by 8 points for the September quarter to 136.
However, it is still well above the total score for Australia (106), and is second only to the Northern Territory (151).
The Property Industry Confidence Survey polled more than 3100 professionals from the property and construction sector in all states and territories for their forward-looking views. A score of 100 is considered neutral.
Key findings from the Survey for WA include:
-
staffing level expectations: although trending upwards to the March quarter, staffing level expectations have been in decline for two consecutive periods, from an index score of 121 for the June quarter to 113 for the September quarter
-
forward work: expectations for this measure have also turned around – the index score previously rose to 157 for the June quarter, but for the September quarter expectations have slumped, reaching 145 on the index
-
state economic growth: West Australian respondents are more pessimistic about expectations for state economic growth, with the index score sliding from 136 for the June quarter to 130 for the September quarter
-
funding for projects: expectations for debt finance availability are more negative, dropping from an index score of 99 for the June quarter to 97 for the September quarter
Property Council WA Executive Director, Joe Lenzo, says the survey revealed some positive highlights for Western Australia.
Commercial office price growth expectations in WA were the highest in the country, with an index score of 141, although this measure had moved down from a score of 154 from the previous quarter.
Although trending downwards, expectations for house price growth were also buoyant. WA was one of only two states or territories that posted positive expectations for residential growth for the September quarter.
“Capital growth expectations for tourism property continue to climb, having been spurred by historically strong room rates and by State Government hotel incentives, including plot ratio bonuses for hotel development,” Mr Lenzo says.
ANZ Head of Property Research, Paul Braddick, says state mining infrastructure spending and tight market fundamentals should drive solid growth in construction activity through 2012, particularly in the commercial office and industrial sectors.
“The Survey results show a majority of respondents expect commercial office (63 percent) and industrial property (54 percent) construction activity to increase over the next year,” Mr Braddick says.
“While Perth house prices remain lower in annual growth terms, housing market pressures are being reflected in Perth unit price growth, which has accelerated to 6.3 per cent in annual terms to June 2012, and advertised rents increasing 15 per cent in the year to June 2012.”
“The outlook for house prices remains positive with 83 percent of survey respondents expecting house prices to remain unchanged or increase in the next year.”
Mr Lenzo says the drop in sentiment for staffing levels and forward work expectations likely reflected the completion of several major building projects in Perth, but were likely to rebound when planned new projects commence.
“The outlook for commercial office, industrial and retirement living property remains sound, with continuing strong capital price growth expectations,” he says.
“The only weak spot was the retail property sector, which has seen further deterioration in capital growth expectations in the September quarter.”
Media contacts:
Joe Lenzo, Executive Director WA, Property Council of Australia
Ph: 08 9426 1200 or 0419 044 768
Paul Braddick, Head of Property Research, ANZ
Ph: 03 8655 3022
propertyoz.com.au/confidence
