ACT property sector confidence is the lowest in the nation. Photo: Michelle Kroll.
Rising costs, red tape and deep concerns about government performance have sent confidence levels in the ACT property industry plummeting, according to new data.
The latest Procore/Property Council quarterly snapshot shows ACT property sector confidence has collapsed to the lowest in the nation.
The figures are the latest ammunition in the property sector’s campaign for planning and tax reforms to drive new development and meet the ACT Government’s own housing targets.
Despite staffing expectations remaining positive and firms still looking to grow, other indicators are heading south.
Confidence has fallen to 104 index points from 111 last quarter, the lowest in the country. A score of 100 is considered neutral.
Forward work schedules are trending upwards, despite wider feasibility pressures, but national and state economic growth expectations are negative, unlike everywhere else in the country.
Residential capital growth expectations are also down, and in the usually buoyant office market, growth expectations are sharply down, the steepest decline in the nation.
Confidence in the ability to secure finance for projects has more than halved since last quarter.
The ACT is also the only jurisdiction forecasting a fall in retail capital growth expectations, and the retirement and hotels sectors are also forecasting weaker conditions.
The property sector’s sentiment towards the Federal Government is the lowest of any jurisdiction, while property taxes and charges ranked as the top issue for the industry at the Territory level.
Property Council ACT & Capital Region Executive Director Ashlee Berry said the results confirmed what the industry has been warning for months – that the ACT is heading over a housing and investment cliff without urgent intervention.
“Confidence in the ACT has dropped to 104 index points, down from 111 last quarter – now the lowest of any jurisdiction in the country. We are the only state or territory tracking down while others hold steady or lift,” Ms Berry said.
“The ACT is the only market nationally where survey respondents have negative expectations for both national and state economic growth, while confidence in the ACT Government’s ability to manage growth has slumped from minus 33.7 points to minus 59.6 points.”
Ms Berry said the collapse in office growth expectations underlines how fragile confidence was in Canberra’s commercial market and the need for immediate action on rates reform, faster approvals and a stronger precinct strategy.
In housing, rising rates, higher taxes, red tape and a slow planning system were all eroding viability, shrinking the pipeline and continuing to constrain delivery.
“It’s a clear signal that feasibility, not demand, is the barrier to getting more homes on the ground,” Ms Berry said.
“We have been warning for months that the ACT was heading for this cliff. The only way out is for government to work with industry to repair the fundamentals: land release, planning reform, and fairer taxes and charges.”
