National survey reveals states' growth expectations

Expectations for housing capital growth over the last 12 months declined to -23 index points, the lowest level since the survey began, with the lowest being NSW at -60 and then Victoria at -43.8, the ACT at -13.8 and then Queensland at -5.1.

Meanwhile, Western Australia and South Australia both recorded positive results at 7.3 and 27.9, respectively.

According to Ken Morrison, CEO of the Property Council of Australia, the reason behind this is due in part to the tightening access to finance, softening forward work schedules, and an increasingly negative view of the economy.

“It’s a message our political leaders need to heed, with the final report of the banking royal commission due in February, a state election in our most populous state and biggest property market (NSW) in March, and then a federal election in May,” Mr Morrison said.

As a result, he said now is not the time to make any changes which “undermine certainty, confidence or incentives to invest in Australian property”.

“It’s crucial that our policy-makers take the longer term view and support sensible policies that sustain and stimulate the growth of Australia’s biggest industry which supports 1.4 million jobs and delivers the places our growing population needs to live and work.

“The global economy headwinds are picking up, foreign investors have been turned away, credit availability has tightened, and our largest residential markets have softened rapidly.”

David Plank, ANZ head of Australian economics, said the overall low results were not surprising.

“Respondents report that the availability of finance will worsen further over the coming year, which is a central feature of [ANZ’s] housing outlook. In turn, respondents also expect housing prices and construction activity will continue to ease,” Mr Plank said.

“We think prices will fall through to 2020, and expect to see declines around 15–20 per cent peak to trough for Sydney and Melbourne.

“We also think the decline in housing construction will accelerate through 2019 and 2020, as the current backlog of work is gradually completed.”