Confidence in the NSW property industry is slowly starting to build, a new survey has revealed.

 

The Property Council of Australia-ANZ Property Industry Confidence Survey shows the confidence index rose from 105 for the March quarter to 113 for the June quarter.

 

The survey polled more than 2300 professionals from the property and construction sector in all states and territories, including 622 from NSW.

 

“The survey points to a gradual increase in confidence in NSW, as the acute concerns over global economic conditions soften,” Property Council Acting NSW Executive Director Edward Palmisano says.

 

Over the next twelve months, 61.1 per cent of respondents expected to increase their forward work schedule, 83.6 per cent thought that staff levels would stay the same or increase, and 43.2 per cent predict a reduction in interest rates.

 

The survey pointed to strong expectations about office capital growth, with 83.7 per cent of respondents predicting that commercial office capital values would stay the same or increase over the next twelve months.

 

Confidence in house price growth also rose, with 74.6 per cent of respondents predicting that residential capital values would stay the same or increase in the coming year.

 

Mr Palmisano says the survey drew out local factors affecting the property industry, with the planning system seen as a significant barrier to investment in NSW.

 

Almost half (49.2 percent) of all respondents thought NSW was not doing a good job in planning and managing growth.

 

“The slow return of confidence shouldn’t be taken for granted. It highlights the urgency and stakes involved in the review of the State’s planning and development assessment systems,” Mr Palmisano says.

 

“NSW needs to re-boot the planning system to make it more responsive to investment through a simpler and more efficient set of rules, as well as cultural reform.”

 

Reflecting concerns about the impact of the carbon price, more than half of NSW respondents (50.2 percent) thought that construction costs would increase in the state over the next 12 months.

 

“The property sector is critical to our economic prosperity as it drives 10 per cent of the state’s wealth and employs more people than any other industry,” Mr Palmisano says.

 

“The NSW Government should take care not to dampen the sector’s newly returning confidence. It should provide a policy platform that gives industry certainty, stability and leadership to build a new era of economic prosperity in NSW.”