Property market confidence is on the rise except for in Victoria

Industry insiders are feeling increasingly confident about the state of the property market, however, Victoria continues to lag behind.

According to the Property Council’s Confidence Index, national confidence in the property market has risen six points to 120, with a score of 100 considered neutral.

Sentiment was highest in South Australia and Western Australia, however, across Victoria, levels dropped to only slightly above neutral – the lowest in the country.

The confidence boost comes on the back of an undersupply of housing, with 40 per cent of participants noting housing supply and affordability as the major issue facing the federal government and 41 per cent for state governments.

Property Council of Australia Group Executive Policy and Advocacy, Matthew Kandelaars, said expectations around a stable interest rate environment and easier access to debt finance were helping to underscore the industry as it deals with broken state planning systems and government inefficiencies.

“The persistent issue of housing supply and affordability remains a significant concern for industry experts despite confidence rising,” Mr Kandelaars said.

“We see in the survey that high expectations around housing price growth are being driven by a dire undersupply of housing across Australia.

According to the survey, housing supply and affordability are the main concerns for the federal and state governments and have remained at historically elevated levels since March 2021. 

Victoria was the only state to see a decline in confidence levels and sits well below the national average – falling to 104 points, compared to the national average of 120.

“While other states maintain stable levels of confidence, Victoria is slipping behind the pack,” Mr Kandelaars said.

“As long predicted, a history of almost-quarterly tax and regulatory changes has dented long-term confidence, which is a story consistent across domestic and international investors.

“The message is simple: the ambitions in the Victorian Government’s Housing Statement rely on stable tax and planning settings, and the confidence of industry to invest.”

The Confidence Index in NSW increased 12 points from last quarter to 123 index points.

An overwhelming number of respondents from NSW said housing supply was the most critical issue for both the federal and state governments at 44 per cent and 40 per cent, respectively. 

Property Council of Australia NSW Executive Director, Katie Stevenson, said the results suggest that concerns around housing had reached every corner of the industry.

“This should be a clear warning to the NSW Government that we are watching, and we are urging them to use every tool at their disposal to get on top of this housing supply and affordability crisis,” Ms Stevenson said.

“We are all united in our determination to up the game on housing delivery.” 

Overall industry confidence in Queensland rose to 120 points, a three-point uptick from the December 2023 survey results.

The Property Council’s Queensland Executive Director, Jess Caire, said despite the slight rise in confidence, various factors remained at play in the state.

“It appears that December’s cabinet reshuffle resulted in a slight uptick in confidence – but it is fair to say concern remains – particularly around job planning and managing growth,” Ms Caire said.

The Confidence Index in the ACT also saw a sharp increase, up seven points from last quarter to 116. 

Property Council ACT and Capital Region Executive Director, Shane Martin, said an overwhelming 50 per cent of respondents listed housing supply as the most critical issue for the ACT Government. 

“The stark reality is that we need to build more homes for our future generations,” Mr Martin said.

Property Council of Australia WA Interim Executive Director, Emily Young, said that while confidence in the state was high, now was the time to attract more workers.

“The state faces a significant uphill battle in building the workforce needed to substantially boost WA’s housing stocks,” Ms Young said.

Meanwhile, expectations regarding housing price growth have continued to increase, reaching 43 index points, the highest level since December 2021 and well above the historical average of 12. 

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