26/07/2012 - 14:43

Sentiment drags for property industry

26/07/2012 - 14:43

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Sentiment drags for property industry

The latest survey of the property and construction industry has told tales of sagging sentiment when it comes to staffing level expectations and forward work but the availability of debt finance is emerging as one of the most pressing issues for the sector.

According to the latest data from The Property Council of Australia – ANZ Property Industry Survey, confidence levels in the future availability of debt finance hit a low of 97 for the September quarter, down from 99 in the June quarter.

Given a score of 100 is considered neutral, the response signals negative expectations and while the other findings were in the positive realm, sentiment is still down across the board.

Staffing level expectations were down to 113 from 121, forward outlook for work was down to 125 from 139 and state economic growth was down as well, from 136 to 130.

Commercial office price growth expectations in WA were the highest in the country, with an index score of 141, although this measure had moved down from a score of 154 from the previous quarter.

Although trending downwards, expectations for house price growth were also buoyant. WA was one of only two states or territories that posted positive expectations for residential growth for the September quarter.

Property Council WA executive director Joe Lenzo said the drop in sentiment for staffing levels and forward work expectations reflected the completion of several major building projects in Perth, but were likely to rebound when planned new projects commence.

“The outlook for commercial office, industrial and retirement living property remains sound, with continuing strong capital price growth expectations,” he said.

“The only weak spot was the retail property sector, which has seen further deterioration in capital growth expectations in the September quarter.

“Capital growth expectations for tourism property continue to climb, having been spurred by historically strong room rates and by State Government hotel incentives, including plot ratio bonuses for hotel development.”

ANZ head of property research Paul Braddick said while Perth house prices remain lower in annual growth terms, housing market pressures are being reflected in Perth unit price growth, which has accelerated to 6.3 percent in annual terms to June 2012, and advertised rents increasing 15 percent in the year to June 2012.

“The outlook for house prices remains positive with 83 percent of survey respondents expecting house prices to remain unchanged or increase in the next year,” he said.

 

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