WA still boasts strong property and construction industry sentiment, but the gap is narrowing between WA and the non-resources states, new research shows.
The Property Council of Australia-ANZ Property Industry Confidence Survey index score for WA fell by 16 points for the December quarter to 120. A score of 100 is considered neutral.
WA is still well above the total score for Australia (102), and is second only to the Northern Territory (130).
However, in all of the non-resources states sentiment for the December quarter has increased, with NSW and Victoria improving by one and four points, respectively.
Property Council WA Executive Director, Joe Lenzo, says the survey results demonstrate sentiment in the WA property sector is moving back to long-term trend.
The Survey polled more than 3500 professionals from the property and construction sector in all states and territories for their forward-looking views.
Key findings from the Survey for WA include:
staffing level expectations: the steady decline in staffing level expectations has continued, although at a slower pace. WA's index score has moved from 113 for the September quarter to 111 for the December quarter.
forward work: whilst trending lower, forward work schedules remain in very positive territory. The index score for WA has declined from 157 for the June quarter to 138 for the December quarter.
state economic growth: West Australian respondents are more pessimistic about expectations for state economic growth, with the index score slipping into negative territory, from 130 for the September quarter to 98 for the December quarter.
house price growth: expectations for house price growth rebounded from a more subdued result for the September quarter, increasing to 118 for the December quarter. WA was only one of three states with positive expectations for house price growth.
Commercial office price growth expectations in WA have dropped back, while residential capital value expectations now lead the nation, Mr Lenzo says.
“With an index score of 117, commercial office price expectations are down from a score of 141 from the previous quarter.
“WA has led the nation-wide rebound in residential capital values expectations, helping to boost the national index from 93 to 101, the first time in four quarters that the index has been positive."
“Capital growth expectations for tourism property continue to climb, having been spurred by historically strong room rates and by State Government hotel development incentives."
ANZ Head of Property Research, Paul Braddick, says the property industry outlook for Western Australia remains positive.
"A total of 44 percent of survey respondents expect Western Australian house prices to be higher in the next year," Mr Braddick says. "The economic benefits of significant WA mining infrastructure spending and tight market fundamentals should also drive solid growth in construction activity through 2012."
The Survey results show respondents expect residential (52 percent), commercial office (48 percent), industrial property (46 percent) and tourism (64 percent) construction activity to increase over 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 is likely to rebound when planned new projects commence.
“The outlook for commercial office, industrial and retirement living property remains sound, with continuing strong planned construction activity in those segments of the market," Mr Lenzo says.
“The retail property sector is still experiencing weakness, with further deterioration in capital growth expectations for the December quarter."
“Despite confidence levels in WA dropping back for the December quarter and slight improvements in the non-resources states, sentiment in WA remains at historically high levels and is second only to the NT."
Joe Lenzo, Executive Director WA, Property Council of Australia
Ph: 0419 044 768
Paul Braddick, Head of Property Research, ANZ
Ph: 03 8655 3022