The Property Council runs a quarterly property sentiment survey and the news for the September quarter out today is not so good. Following several quarters of gains, presumably on the back of rate cuts, it appears property insiders are sensing that this is no ordinary cycle:
As you can see, the falls in confidence were pretty coast to coast. Of course, there’s always next year:
However, market fundamentals are tightening. Low rental vacancy is driving real rents higher and new building activity remains well short of underlying housing demand. Weak developer sentiment and difficult credit availability mean dwelling completions could fall 50,000 short of underlying demand in 2012/13, exacerbating existing pressures in rental markets. Rising rents, improved affordability and weak equity markets should increasingly attract investors and first home buyers. Consequently, house prices should find a floor in most capital cities in the year ahead, although weakening state economic activity suggests prices in Hobart and Melbourne remain vulnerable.
The report is authored by Paul Braddick of ANZ. As if you didn’t know!