Property confidence spikes as credit sentiment rises

Confidence in the property industry has bounced, driven by a sharp improvement in credit sentiment, according to new research from ANZ and the Property Council.

The latest ANZ/Property Council Survey, which assessed property industry expectations for the September quarter of 2019 from 990 stakeholders, has reported a spike in sentiment off the back of the federal election.

Property industry sentiment rose from 113.4 index points for the three months to 30 June, to 122.3 index points for the September quarter, with confidence spiking in every state and territory except the ACT, where it dropped from 137.4 index points to 124.3.

The survey also revealed that expectations regarding credit availability also surged, rising from -29.1 index points to 3.2. Credit sentiment improved in every state and territory, with Western Australia recording the sharpest spike (-29.0 index points to 15.6).  

According to Ken Morrison, CEO of the Property Council, the improvements in sentiment have been triggered by political and economic developments.

“Following the federal election, we have had a quadrella of positive policy news, which translated into a strong sentiment bounce: certainty on negative gearing and capital gains tax changes, an interest rate cut, APRA’s lending standards review and the proposed first home buyers loan deposit scheme,” he said.

“These are very welcome steps and have led to a much stronger expectations of national economic growth and the availability of credit.”

ANZ’s head of Australian economics, David Plank, agreed, adding that the boost in credit sentiment is a particularly strong sign of a property market recovery.

“This measure has proved to be a reliable indicator of shifts in housing activity in the past, and if it remains, so it suggests better times ahead,” he said.

However, Mr Morrison has warned that the recent shift in the global economic outlook and proposed policy reforms from state governments could pose a threat to market confidence.

“[The] property sector is not immune from the challenges facing the rest of the economy, and a number of state governments have just embarked on a range of investment-sapping tax increases,” he said.

“State budgets in Queensland, Victoria and South Australia have hit the property industry with arbitrary and poorly designed tax increases, which will hurt investment and job creation and risk undermining the current sentiment turnaround.”

From Mortgage Business

Disclaimer: Please read

View

These articles provide you with factual information only, and are not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser. The information in these articles is believed to be reliable at the time of distribution, but EFS does not warrant its completeness or accuracy. Neither EFS nor its related bodies, nor their directors, employees or agents accept any responsibility for loss or liability which may arise from accessing or reliance on any of the information contained in these articles. For information about whether a loan may be suitable for you, call EFS on 02 8041 6746.

Leave a Reply

Your email address will not be published. Required fields are marked *