Why Australian property confidence is up

A new survey has found that
property market participants have more confidence in the prospects for homes in
Australia’s resource-rich regions than in other areas of the country.

The survey found that ‘there was
increasing divergence in property industry confidence across the states with
confidence highest in the Northern Territory.

Confidence growing fastest in Northern Territory

The latest Property Council of
Australia (PCA) – ANZ Property Industry Confidence Survey found that certain
areas of the country were proving more popular with property buyers and sellers
than others.

ANZ and the PCA report that
‘resource-sector states (WA [Western Australia], Queensland, Northern
Territory, South Australia) are indicating the greatest confidence, while
Victoria, ACT [Australian Capital Territory] and Tasmania are indicating the
lowest confidence.’

The biggest jump in confidence
over the last quarter has been in the Northern Territory, home to Darwin, Palmerston
and Alice Springs.  Next come
Western Australian and Queensland, which both recorded strong gains.

Conversely, confidence fell in
Victoria, Tasmania and the ACT, which do not have strong ties to the resources
boom.

Property market participants have
least confidence in Tasmania due to poor job prospects, decreasing tourism and
a weak property market.

The report says: “The data
indicate the significant negative impact of ongoing economic and global
financial market uncertainty that is weighing on housing market confidence and
expectations.”

Outlook for property in Australia broadly positive

While ANZ expects house prices
across Australia to fall slightly in 2012, its outlook is broadly positive,
particularly as the bank expects the Royal Bank of Australia to cut interest
rates further in the second quarter of 2012.

According to Property Observer, ANZ maintains a “cautiously optimistic
medium-term house price view supported by a robust economic outlook, limited
forced selling, improved affordability and an ongoing tightening of the
Australian housing demand/supply balance”.