Undersupply drags on property industry confidence

PROPERTY professionals say a lack of housing supply is their major worry, according to a new survey.

Despite a marginal rise in confidence among the property industry, the latest Procore/Property Council Survey shows supply shortages continue to be the big issue.

 The survey of Property Council of Australia members found industry confidence remained stable over the September quarter.

Their Confidence Index rose two points to 108 after a 14-point drop from 120 in the July quarter.

Housing remains a concern for industry confidence, as the industry anticipates delivering fewer homes while expecting prices to keep rising.

Housing construction expectations over the next 12 months are seven percentage points below the historical index average.

Yet housing price growth expectations over the next 12 months are 20 percentage points above the historical index average.

A near record high number of participants (43 per cent) chose housing supply and affordability as the most pressing concern for the federal government. Likewise, 42 per cent said it is the most critical issue for state governments.

Property Council Group Chief Executive Mike Zorbas said the fact that industry expects to build less homes than the long running historical average in a housing crisis should ring alarm bells.

“We must build our way out of the housing crisis. We continue to need governments to come to the table with the right planning and tax settings,” Mr Zorbas said.

“Just a few months into the national target window of 1.2 million new homes by 2029 we know we will fall short by a third unless further reforms are adopted.

 “We need all parliamentarians to walk the talk on planning and investment boosts for last-mile infrastructure and accelerating purpose-built student accommodation and retirement living communities.

“Equally, Senate amendments proposed by us, the Community Housing Industry Association and National Shelter can deliver 105,000 rental homes over 10 years, including an immediate 1,200 affordable homes,” he said.

Confidence levels in Victoria remain in negative territory despite rising by one point to sit at 91 on the confidence index.

 New South Wales rose two points to 107, Queensland climbed seven points to 113 and South Australia increased 11 points to 132, the highest in the country.

Western Australia saw a decrease in confidence levels, falling 19 points to 119. Likewise, ACT declined 10 points to 104.

Procore’s APAC General Manager Chris Skelton said: “The property industry has an important role to play in solving some of the biggest societal challenges in Australia, including affordable housing and the net zero transition.”