Mounting conviction that South Australia’s resources industry will revive the state and the easing of heritage constraints in Adelaide’s CBD have seen a second consecutive jump in property industry confidence.
The Property Council-ANZ Property Industry Confidence Survey results released today show industry expectations in the June Quarter 2012 rallying again, leaping from 105 to 112 on the Index. It follows the local index climbing from the red into the black in the March Quarter - this initial bounce most likely reflected optimism about BHP Billiton signing off on the Olympic Dam expansion project.
Property Council of Australia (SA Division) Executive Director Nathan Paine says these results showed the burgeoning optimism of the March quarter was not an aberration.
“From this second bounce in sentiment it would appear that South Australian property professionals are factoring in even greater growth over the coming 12 months,” Mr Paine says.
“This ongoing confidence probably reflects reinforced optimism about the Olympic Dam expansion, and it might also extend from new opportunities emerging in the CBD as a result of the Government and Council’s agreement on historic zoning reforms.”
“This isn’t simply a matter of the industry expecting a windfall from new mining riches or expanded development opportunities - it’s recognition that an economy-wide shift for the better is underway.”
“The industry sees that this shift will lift South Australia out of its dependency on low-value commodities and a declining manufacturing base, and in the longer term this will have enormous spin-off benefits for the property sector.”
“The Government should view these results positively as they could readily be considered an endorsement of the planning reforms that were widely tipped as the survey was coming to a close.”
ANZ Head of Property Research, Paul Braddick says: “While expectations for the residential property market remain weighed down by weak sentiment, soft employment growth and a balanced housing market, the positive survey result was driven by confidence in the commercial property outlook.”
Mr Braddick says he expects property market confidence to remain positive through 2012, reflecting the economic benefits from a number of large non-residential building redevelopments in Adelaide (Royal Adelaide Hospital, Adelaide Convention Centre and Adelaide Oval), and a positive outlook for regions benefitting from major mining and energy projects (including the proposed Clinton and Arckaringa Basin coal-to-liquid gas project and Olympic Dam).
The Survey asked a supplementary question about the perceived importance of a Federal Government budget surplus at the upcoming 2012-13 Budget. Results showed that the property sector ranked the need to balance the budget lower than investing in our future through nation-building infrastructure.
“Governments should take heart from this as the industry appears to acknowledge that this is an extremely tough time to achieve a balanced budget,” Mr Paine says.
“It’s times like this that Government borrowing can be an important tool for stimulating growth and making critical infrastructure investments.”
“The South Australian Government has taken some bold steps in investing in long-term infrastructure in recognition that infrastructure is of benefit to multiple generations, not just existing taxpayers,” Mr Paine says.
“Such investments are all the more critical right now as we prepare for generational changes to our economy and we stand ready and willing to work with Government to deliver a better South Australia.”
Nathan Paine, Property Council SA Executive Director
0448 445 177
Paul Braddick, ANZ Head of Property Research
03 9273 5987