Confidence in Tasmania’s property industry has improved but is still amongst the lowest in the nation, according to new research.
The latest Property Council-ANZ Property Industry Confidence Survey placed Tasmania at 86 on the index for the September quarter - an improvement from 73 for the June quarter but only one point away from the nation’s lowest score.
The index score for all Australia is 106. A score of 100 is considered neutral.
The survey polled more than 3100 professionals from the property and construction sector in all states and territories for their forward-looking views.
Property Council Executive Director for Tasmania, Mary Massina, says it is the fourth consecutive quarter of negative sentiment for the state’s property and construction industry, and indicated the sector was still in the “confidence doldrums”.
“Despite the statistical bounce in sentiment upwards in this quarter, there is no joy here for the industry or the State Government,” Ms Massina says.
“Furthermore, across residential, tourism, retail and office sectors the industry in Tasmania is predicting a stall in construction. Respondents believe only the retirement living sector will increase construction activity for the quarter.”
“Again, the survey highlights the fact that the same impediments to confidence – domestic and economic conditions, state and federal political environments and planning controls – are negatively influencing the state’s biggest private sector industry.”
ANZ Head of Property Research, Paul Braddick, agrees the outlook for Tasmania’s property market was not positive.
“The pessimistic view for Tasmania’s property sector reflects weak economic activity in the state,” Mr Braddick says, with negative trend state final demand (-0.6 percent in the year to March 2012), the unemployment rate increasing to 7.3percent in May 2012 (from a low of 5.1 percent in August 2011) and house prices 7.5 percent lower in the year to June.
“A subdued outlook for the Tasmanian economy for 2012-13 and weak construction activity expectations presents some further downside risk to Tasmania’s property industry through the remainder of 2012.”
Ms Massina says negative sentiment, combined with a lack of Government reform in key areas such as planning, is directly impacting on the decisions made by an important economic driver to the state’s economy.
“In addition, the impending start of the new regressive stamp duty regime in October will be weighing on investors’ minds,” she says.
“The reality is Tasmania needs to make up its mind whether it wants investment and job creation, because the hallmarks of high unemployment - a 25 percent drop in residential construction combined with a fall in commercial construction of 20 percent - would indicate otherwise.”
“The property industry wants more than the Government’s rhetoric on key micro-economic reforms such as planning, water and sewerage and local government – we need to see commitment and delivery.”
“The Labor Green Government should recognise the property industry for what it is: 40,000 hard-working Tasmanians who pay taxes, buy houses, send their kids to school and who are vital to Tasmania’s economy.”
“They deserve recognition and support.”
Mary Massina, Property Council Executive Director, Tasmania
Ph: 0408 594 312
Paul Braddick, Head of Property Research, ANZ
Ph: 03 8655 3022