New research has revealed that Australians are continuing to lose confidence in the property market, with sentiment in the residential sector now at its lowest level since December 2012.
According to the latest ANZ-Property Council Survey, confidence in the property sector dropped 0.2 index points to 129.4 during the June 2016 quarter, and has fallen further to 126.8 in the September quarter so far.
The continued fall is said to be driven by the residential segment, which continues to cool from the peak of 2015.
“Sentiment in the residential property sector is still easing, and is now at its lowest level since December 2012,” it said.
Furthermore, the results show an increasing number of industry firms expect growth in both construction activity and capital values to ease over the next 12 months.
“This softness is largely to be expected given regulatory changes introduced last year and tightening of finance criteria by many lenders,” it said.
“Tighter borrowing conditions for developers and investors are certainly having an impact on the market, with firms reporting that the availability of debt finance continues to worsen.
“The decline in sentiment continues to suggest that the housing sector’s contribution to [economic] growth will ease from here.”
Commercial property sentiment has also fallen slightly, led by a drop in the industrial segment. However, post survey analysis reveals that confidence in commercial property has been consistently stronger than the residential sector for the past year, and the outlook for the sector is more positive than its residential counterpart.