South Australia’s commercial property sector is struggling in an environment of post-election uncertainty, a survey shows.
The local drop in confidence contrasts with a national result in the latest Property Council/ANZ Property Industry Confidence Survey which shows the property and construction industry continues to lead the broader economy.
“For the second consecutive quarter, all states and territories have positive sentiment. However, South Australia’s commercial property sector has battled to hold up to expectations thanks to considerable post-election uncertainty,” the Property Council of Australia’s SA Executive Director Richard Angove said.
“Nationally, the industry is strong and steady, which is good news for those states weathering difficult economic conditions.”
The survey shows property industry confidence in SA dropping by 20 index points, from 130 in the March quarter, to 110 looking ahead to the June quarter.
The drop off in South Australia’s national economic growth expectations from 27 index points to just three in the past quarter to June 2014, reflects concerns that state infrastructure spending will dry up with a negative impact on future business growth, the report says.
National staffing level expectations continue to gain momentum with five of the eight states and territories expecting an increase in staff.
South Australia, the ACT and Queensland predict a drop in staffing levels which in South Australia’s case, reiterates concerns around Holden?s closure and the end of significant state infrastructure spending.
“The results show an industry cautious about growth opportunities,” Angove said.
“With South Australia’s state budget due in June, the next quarter will likely give a better indication of industry direction as it becomes clear when government-backed projects are likely to come to market.
“A clear idea of the projects the Government wishes to progress with, would combat some of the uncertainty surfacing around the much-hyped infrastructure cliff as well as improve the Government’s own industry rankings which fell away in the June quarter.”
