ANZ-Property Council Survey: Improving credit outlook drives sentiment higher
The ANZ-Property Council Survey for the September quarter shows a solid bounce in sentiment in Australia’s property sector.
Just as the recent weakness in the property sector has been more pronounced in residential, the bounce in sentiment in the September quarter was more marked in the residential sector. The improvement was apparent across all the key housing indicators including the outlook for credit availability, prices and construction.
The improvement in confidence was broadly based, with NSW, Victoria, Queensland, Western Australia and South Australia all posting gains. Of the states, only Tasmania saw a decline.
The improvement in confidence is encouraging and suggests that the worst of the house price falls are probably behind us. With the reality of ongoing constraints on credit availability, however, we expect that the bounce in prices and construction will be much more muted than the rebound in some residential indicators might suggest.
Sentiment also bounced in the commercial property space in the September quarter, and remains well above confidence in the residential sector. The outlook for the office, industrial, aged care and accommodation segments all improved in the quarter.
ANZ Head of Australian Economics, David Plank, commented:
“Since April we’ve been flagging that there were emerging signs of stability in the residential property market. In particular, we noted the fact that pace of house prices declines was slowing and that the auction clearance rate was beginning to rise. Over the past month lower interest rates, the proposed change to the interest rate floor by the regulator, and the removal of uncertainty around the impact of the possible tax policy changes have boosted sentiment toward housing. This boost is reflected in the rise in the auction clearance rate in Sydney and Melbourne to its highest level in more than a year."