Confidence in the real estate industry is growing, thanks to stimulus measures such as the HomeBuilder Grant as well as support from state and territory governments for new and first-time home buyers, according to new figures from the Property Council of Australia.
In a joint survey with ANZ, the Property Council found that the national trust score for the December 2020 quarter had increased by 6 index points to 82.
Ken Morrison, Managing Director of the Property Council, said the numbers showed stimulus measures like HomeBuilder were providing a "much needed boost to the real estate industry at a critical time".
"As the program became available in all states and territories, we have seen a strong upturn in sentiment among those involved in residential development," said Morrison. "HomeBuilder is the pop star of the government stimulus packages released so far – very effective, immediate, and value for money." The challenge will be to keep that momentum going beyond December, when the current regime expires and we envision a huge drop in population growth due to the border closures. "
While the modest growth in trust is certainly welcome, the Property Council pointed out that the score is still well below a neutral score of 100 and the historical survey average of 123. According to Morrison, this shows that there is still a long way to go before real estate industry sentiment returns to pre-COVID levels.
“Government stimulus will be essential to help our industry stimulate economic recovery,” Morrison said. “As household income supports such as JobSeeker and JobKeeper are restored over the next few months, all levels of government will need to step in with incentives that will provide quick and effective stimulation to create momentum for recovery.”
Down, the majority of markets surveyed reported improving sentiment, with Western Australia registering a 25-point jump to return to positive territory to lead the country to 107, followed by South Australia (98), New South Wales (84), ACT (81), Queensland (79) and Victoria (64).
"While sentiment in the housing industry remains negative, it is clearly improving," said Felicity Emmett, senior economist at ANZ. “The outlook for home construction is a highlight, aided by the federal government's HomeBuilder program. The program, along with other state government initiatives, is clearly giving the housing construction industry a boost – albeit with sharply declining population growth and the rental market under pressure, headwinds remain for the housing sector. "
Looking to the future, Emmet said the recent federal budget is expected to boost confidence both in the real estate industry and more broadly, although the outlook remains extremely difficult and more stimulus is needed. may be needed over the next few months.
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