Login
iscover
While confidence in the property market has risen across the March quarter, extensive regulations, low supply, taxes, and affordability issues may hinder the market’s recovery.
The latest Property Council Survey has shown a growing optimism in the property industry over the March quarter, with the Confidence Index rising 9 points to 125.
The Property Council of Australia (PCA) surveyed 1,170 industry workers, including property managers, agents, developers and service providers, between 10 March and 25 March 2025.
While overall confidence in the property market recovered nationwide, Victoria and the ACT Confidence Index scores remained below the national average, at 108 and 120 points, respectively.
Property Council chief executive, Mike Zorbas, said the confidence boost in the Australian property market was linked to projected economic growth, as the industry has been anticipating further interest rate cuts.
“The Procore/Property Council Sentiment Survey shows that in the run-up to ‘Liberation Day’, the industry has been growing in confidence, especially following the RBA’s recent interest rate cut,” Zorbas said.
The index for construction activity expectations over the next 12 months rose to 30.3, reaching its highest level since March 2022 and exceeding the long-term average.
The survey also indicated that hiring expectations nationwide rose from +16 to +19 points, while future work pipelines more than doubled from +16 to +39 index points.
Similarly, expectations for residential house price growth across the nation remained high, with an index score of 42.7, surpassing the long-term average of 14.6.
“Investors are still screening for the most stable risk-adjusted returns. Australia retains stabilising institutional checks and balances, good demographics and raw materials aplenty,” Zorbas said.
Despite the rise in confidence, the surveyed pointed out that housing supply, affordability and high taxes could hinder the industry and further undermine the recovery.
Nationwide, 40 per cent of respondents indicated that affordability and housing supply were the industry’s most challenging issues, which the new federal government will have to address to boost housing.
Following housing, 24 per cent of the surveyed indicated property taxes and charges were a major concern.
“We need to simplify regulations, expand the construction workforce and eliminate investment-deterring taxes to boost housing supply nationwide,” Zobras said.
At the state level, PCA warned that the surge in confidence in NSW could be “cut short” if the government implements changes to the emergency services levy (ESL), which would result in property owners, including everyday “mum and dad” investors, bearing the brunt of the levy.
Property Council NSW executive director, Katie Stevenson, stated that the levy changes would cause investors in NSW to exit the market, leading to increased rents.
“The data predicts more jobs, rising investment, and a strong pipeline of future projects – all clear signs that optimism is returning,” Stevenson said.
“However, if the government keeps increasing property taxes, charges and fees, that confidence could vanish overnight,” she said.
Stevenson said that the ESL levy change would place the financial burden solely on property owners, even though most of the 140,000 annual callouts from Fire and Rescue NSW were due to road incidents, animal rescues, or medical assistance.
“It’s an unfair hit on smaller landlords, many of whom will have no choice but to pass on the costs, pushing rents even higher when housing affordability is already in crisis,” Stevenson said.
PCA said emergency services should follow the health and education funding models through general revenue rather than being sourced from property investors.
Similarly, Property Council Victorian executive director, Cath Evans, said Victorian respondents have identified the state’s taxation regime as a significant factor impacting the housing market.
“This new survey sounds alarm bells on Victoria’s punitive property taxation environment, with 54 per cent of survey participants citing property taxes and charges as the most critical issue for the industry,” Evans said.
“Despite significant reform to help fast-track Victoria’s planning process, the government’s eye-watering stream of taxes are putting a brake on project feasibility and delivery.”
“These taxes aren’t just killing off homes; they’re crushing the feasibility of much-needed new commercial projects that would generate new Victorian jobs,” she concluded.
You are not authorised to post comments.
Comments will undergo moderation before they get published.