Global uncertainty rattles confidence in local construction and property

There’s a less optimistic property industry outlook for the September quarter on heightened global economic uncertainty, the Property Council of Australia-ANZ Property Industry Confidence Survey shows.

The survey polled more than 3,100 professionals from the property and construction sector in all states and territories for their forward-looking views.

The weakened confidence was weighed down by heightened concerns about the outlook for the economy and the impact on construction activity.

The survey also revealed increased concerns about the availability of debt finance to fund activity over the next year, reflecting the impact of increased financial market volatility on the cost and availability of debt finance.

The property industry confidence index decreased byseven points in the September quarter (106 compared to 113 in the June quarter).

 The ACT recorded the biggest shift in sentiment, dropping by 16 points on the index – and at 85 on the index the ACT has the lowest confidence of any state or territory (100 is considered neutral).

Tasmania has the second-lowest score, at 86 on the index, but it increased by 13 points over the quarter.

SA and ACT were the states or territories to shift from positive to negative over the period.

 The Property Council chief executive, Peter Verwer noted there had been a sudden, downward shift in sentiment in the sector following three consecutive periods of increasing sentiment nationally.

The biggest loser in the September quarter was the office sector, which dropped from 111 to 104 on the index. However, this sector retains the second-highest score of any asset class. He noted every property asset class had recorded a downward trend in sentiment for price growth, a sharp turn-around from the previous quarter in which sentiment for price growth expectation was positive for all asset classes except for shopping centres.

 However the  ANZ chief economist, Warren Hogan, says market fundamentals suggest the broader commercial property sector may be at the early stages of a multi-year cyclical upswing.

This article first appeared on Property Observer.