Turmoil in international economic markets combined with high state taxes is having an impact on confidence in the Victorian property industry, a new survey by the Property Council of Australia has revealed.
The Property Council’s inaugural Property Industry Confidence Survey, carried out across Australia in September 2011, has shown that a large proportion of the Victorian respondents expected that both the state and the national economy would weaken or stay the same.
Property Council of Australia Victorian Executive Director Jennifer Cunich said the survey illuminated a range of issues of concern for the property sector.
"The overall sentiment in Victoria remains positive for the moment however people are visibly concerned that cracks are beginning to appear and that there could be some serious challenges looming."
"The industry is solid but people aren’t feeling confident enough to promote and grow in the short term," said Ms Cunich.
The survey showed that 42.9% of respondents will hold staffing levels over the next 12 months and that 47.3% feel that Victoria’s economic growth will experience no change over the next quarter compared to the current quarter.
"The Property Council’s survey shows that in Victoria, we need to urgently harness the growth we are experiencing and ensure that the economy and society continues to benefit from this growth," said Ms Cunich.
"The Victorian Government must address the current rates of tax on business in Victoria with 53.3% of respondents feeling that business taxes are either high or too high. This combined with the view of 60.9% of respondents that construction costs will increase over the next 12 months paints a very expensive picture for those looking to invest in Victoria’s property industry."
When asked about their expectations of change to capital values in Victoria, 53.9% of respondents believe that residential values will decrease, 40.7% believe shopping centre values will decrease and 39.7% believe tourism and leisure values will decrease.
Ms Cunich urged the Victorian Government to continue its commitment to addressing housing affordability and pointed out that a massive 80.4% of respondents feel that Victoria is facing a housing affordability crisis.
"The survey demonstrated that almost half the respondents believe taxes and levies are the biggest contributor to Victoria’s overwhelming housing affordability crisis. This is a number the Victorian Government simply cannot afford to ignore," stated Ms Cunich.
"While this survey shows that Victoria is not in trouble yet, the Victorian Government must take heed of the warning signals. If they aren’t properly managed, cracks will begin to appear," warned Ms Cunich.
Jennifer Cunich, Executive Director - (03) 9650 8300
Danni Addison, Public Affairs Manager - (03) 9664 4230 or 0408 861 408