Mixed blessings across the country after important Survey

VICTORIA’S property sector is under extreme pressure, NSW is treading water and Queensland has cause for optimism.

These were key takeaways after the release of the latest Procore/Property Council Industry Sentiment Survey, one of the first major looks at the property industry since the start of the Middle East conflict.

In a major blow for the future of housing supply, Victoria’s property sector has recorded its lowest level of industry confidence since September 2020, as concerns around the state’s economic management and property tax settings continue to weigh on sentiment in the lead-up to the state budget.

The latest quarterly Survey shows Victoria’s sentiment index falling 15 points from 99 to 84 – now sitting 20 points below the national average of 104.

Victoria recorded the lowest sentiment nationally for its state government’s handling of planning and managing growth, recording negative 71 points.

Sentiment declined nationally, with the survey completed by Property Council members as the impacts of the global fuel crisis were also beginning to be felt across the economy.

Recent Property Council research shows that more than 65 per cent of Property Council member organisations are being impacted by rising fuel costs, with more than 70 per cent experiencing increased construction costs.

Around half are experiencing higher transport costs. More than half of respondents say projects have been delayed, while just under half have experienced a decline in customer demand.

Property Council of Australia Victorian executive director Cath Evans said the results show a sector battling under the combined weight of tax pressure, rising costs and global volatility.

“The numbers don’t lie – confidence is falling and it’s becoming harder for the industry to deliver the homes Victorians need,” Evans said.

“Right now, the cost of developing in Victoria simply isn’t stacking up for a vast array of projects. Rising construction costs and the highest property taxes in the country are stalling projects and deterring investors.

“This is a critical moment. Without action to restore confidence, housing supply will fall further behind demand, as we saw in the latest round of ABS dwelling completion figures.

“We need to be delivering more housing – particularly affordable homes – while also fast-tracking major projects that support growth.

“Next month’s Victorian Budget is an opportunity to reset – through targeted tax reform, faster planning and a clear focus on getting more homes built.

Evans said that the property sector continues to call for the appointment of a Housing Commissioner to oversee the sector.

NSW property industry confidence has dropped sharply

The Survey shows NSW confidence falling to 109 index points, down from 128 last quarter, but still above the national result of 104.

Property Council NSW executive director Anita Hugo said the March quarter results reflect one of the first industry-wide snapshots capturing the impact of the Middle East conflict, fuel shortages and escalating input costs.

“The result is a sharp reset in confidence driven by costs and feasibility, not by a lack of demand for housing, commercial space or investment,” Hugo said.

“NSW confidence has clearly taken a hit, but it remains in positive territory and above the national index.

“That tells us there is still appetite to invest and build in our state, however the industry is being squeezed hard by higher construction, financing and operating costs.”

Capital growth expectations across NSW remain mostly positive, though weaker than last quarter.

Residential, industrial, retirement living and hotels all remain in growth territory, while office and retail expectations are subdued, reflecting higher financing costs and softer tenant demand in some segments.

Hugo said the industry’s ongoing engagement with the NSW Government had been constructive, with Building Commission NSW’s initial housing industry roundtable this week reflecting a welcome step to better understand the cost and feasibility pressures facing the industry.

“Faster approvals and infrastructure coordination matter more than ever, paired with action on taxes, charges and fees that are making projects unviable,” she said.

“For confidence to translate into cranes on the skyline and homes on the ground, we need to actively reduce the cost stack, especially at a time when global factors are already pushing costs higher.”

Queensland’s property sector is optimistic

The Survey showed Queensland industry sentiment was positive at 124 index points, a decline from results recorded in December 2025, but comfortably above the national result of 104 index points.

Property Council Queensland executive director Jess Caire said the results were encouraging but served as a reminder that Queensland couldn’t afford to waste current opportunities.

“With a strong future pipeline of work and ongoing population growth, it’s not hard to see why industry sentiment in Queensland remains buoyant,” Caire said.

“However, we cannot take these circumstances for granted. What the Survey results show is that as our pipeline grows, industry is uncertain about who will build and complete those projects.

“These results remind us that the productivity conversation is still live and that the second step of securing and growing a sustainable, long-term construction workforce will be essential to capitalise on Queensland’s current momentum.”

Other key insights in the survey revealed Queensland also led the nation for capital growth expectations across office and hotel property, reflecting the commercial office and hotel bed crunch expected in the lead up to the 2032 Olympic Games.