Property sector expects the money flow to dry up
Confidence in the property sector has dived as a record number of businesses feared their access to finance would dry up as interest rates rise, according to a report from the ANZ Bank and the Property Council.
Confidence levels fell sharply in the property sector
The report said that expectations of higher interest rates and tighter credit availability were likely to be realised over the coming year.
It said company failures in recent months was probably feeding concerns of a squeeze on property finance.
“Housing prices will decline, but a sharp correction seems unlikely given the strength of household balance sheets,” the report said.
It also found that residential sentiment was below its long-term average.
In Queensland, confidence fell 21 per cent in the June quarter, but still remained in positive territory.
The council’s Queensland executive director Jen Williams said the drop was unsurprising given the increase in interest rates and inflation. The flu season, Covid and the skills shortage were also taking their toll.
However, she said there was still a strong pipeline of anticipated work.
The survey found a 30 per cent fall in capital growth expectations for housing.
“The decline in expectations around residential construction, however is a concern, particularly given the recent census data that shows how popular Queensland has become,” Williams said.
Sentiment about the tourism sector fell the least of all the sectors and was above the long-term average.
