WA property players least negative despite pandemic blow
West Australian property industry participants expect the impact of COVID-19 on their businesses will improve over the next three months.
Sentiment across the WA property industry is the second-most positive in Australia with the smallest proportion of respondents believing things would get worse, according to the ANZ/Property Council Survey for the September 2020 quarter.
The survey, conducted between 15 June and 1 July, 2020, revealed a lift in sentiment, with WA confidence rising to 82 points for the September quarter, up from 63 points in June. The national confidence score rose to 76 points from 62 points previously. A score of 100 is considered neutral.
Across Australia the survey reflected concerns about the impact of the pandemic on forward works, staffing levels and national and state economic growth. Of those surveyed Australia-wide, 45 per cent said their business had relied on the Federal Government’s JobKeeper program and 55 per cent said the Federal Government should extend JobKeeper beyond its September 27 cut-off date.
In WA, expectations for capital growth are negative across all sectors, with retail and hotels, tourism and leisure the hardest hit. The September quarter survey revealed elevated levels of concern about commercial office and residential capital growth, which had deteriorated since June. However, WA respondents reported the strongest outlook for residential construction activity over the next 12 months indicating that federal and state government incentives for housing are driving confidence levels.
WA respondents had the worst office capital growth expectations in the country, falling from negative 48 to negative 75. One potential explanation includes anecdotal reports of unease about the longer-term impact on values of the Commercial Tenancies Code of Conduct and the fallout of having land tax relief beyond the reach of most WA landlords. Expectations for industrial improved from negative 28 to negative 9; hotels from negative 82 to negative 75 and retirement living also improved from negative 19 to negative 7.
Retail capital value expectations deteriorated further from negative 50 to negative 64.
Except for the ACT, WA was the only State or Territory to record positive forward work expectations over the next 12 months.
Property Council WA Executive Director Sandra Brewer said the impact of the Federal Government’s HomeBuilder and the State Government’s Building Bonus was likely to materialise in the next quarterly survey.
“I suspect the full benefit to be delivered by the WA Government’s $20,000 Building Bonus – on top of the Federal Government’s $25,000 HomeBuilder – will underpin an improvement in December quarter sentiment,” Ms Brewer said.
However, WA respondents were the most positive of those in any State about Federal and State Government performance.
Property industry respondents cited economic management, cities and infrastructure delivery, tax reform and housing supply and affordability as the four most critical Federal Government issues.
For State Governments, the most critical issues were property taxes and charges, planning and regulation reform, housing supply and affordability, development around transport nodes and vibrant city centres.
“The response of Premier Mark McGowan’s State Government to the crisis has been decisive and effective, ensuring the WA property industry is best placed to recover and retain jobs,” Ms Brewer said. “Further policy reform is important to eliminate obstacles to job-generating projects. The State recovery effort is far from over and we look forward to further planning reform and work to extract the best possible economic outcome from a City Deal for Perth.”
Contact: Sandra Brewer | M 0418 501 030 | E [email protected]
The ANZ/Property Council Survey started in 2011. It is now one of Australia’s largest surveys of sentiment in the property industry – our largest industry and employer which supports 1.4 million jobs. Respondents are drawn from across the property industry, including property developers, managers and agents and service providers. The survey was conducted online between June 15 and July 1 and included 955 respondents, 108 of them in WA.
To view select ANZ/Property Council Survey historical data series, visit the Property Council’s Data Room
To find out more about the ANZ/Property Council Survey and our Support Sponsor RCP, visit www.propertycouncil.com.au/confidence