The ANZ Property Council Survey has shown continued confidence in the investment outlook of the property industry. The outlook is overwhelmingly positive and steady.

The ANZ Property Council Survey is the largest business sentiment survey with1,700 respondents.

Consumers and businesses have a tendency to see elections as uncertainty and often postpone decisions until after they are held. We are heading into the longest campaign in Australia’s history and this will test sentiment.

In recent times there has been some media commentary about ‘property bubbles’, but the data does not support these claims.

Property industry is neither going through boom nor bust – instead, it is steadily meeting the continued strong demand for housing in Australia.

We are seeing confidence underpinned by the continued strong economic performance of our largest states – NSW and Victoria.

This is a positive and steady outlook – that reflects the steadiness of the economy. Australia is witnessing steady employment growth, low and stable interest rates, stable rents and house prices. However, consumer sentiment is tentative, wages growth is weak and there is some state by state variability.

The ANZ Property Council Survey found:

· The national confidence index positive and steady at 131 (100 is neutral)

· Sentiment has not shifted in 12 months.

· The forward work schedule for the industry has increased over the past quarter. 

· Staffing level expectations remain positive and steady.

· Economic growth expectations are positive and steady.

· The availability of finance expectations continue to fall – this is understandable given APRA’s lightening of lending requirements.

· Capital growth expectations are positive in all sectors (Residential, office, industrial, retail, retirement and hotels)

· Foreign residential property sales have fallen slightly to 22 per cent of sales

· Foreign commercial sales have risen to 20 per cent.

Richard Yetsenga, ANZ Chief Economist (Acting) said the Australian economy is on firmer footing in 2016 than previously envisaged.

Labour market conditions have improved with Australia’s unemployment rate at the lowest level in 2½ years.

Slower housing market, weak wages growth and tentative consumer confidence all remain key challenges to both housing construction and household spending.

Importantly, the ANZ-Property Council Survey indicates a steady year-ahead pipeline of work in the property sector, which is ‘doing its bit’ to offset an otherwise subdued business activity outlook.

With the risks around the global outlook dissipating, we think that the Reserve Bank will keep the cash rate unchanged at 2%.