A majority of Australia’s real estate professionals continue to lament the federal government’s handling of the economy, new research has found.
According to the latest Real Estate Business’ Quarterly Sentiment Survey, undertaken in the second half of December, 81.9 per cent of the 171 respondents said they weren't impressed by the federal government’s management of the Australian economy.
This was only marginally better than the previous survey’s findings in October, when 85.5 per cent of respondents said they were unhappy with the Gillard government’s handling of the economy.
Around one-third of respondents (32.7 per cent) said economic conditions were better than the previous quarter, with the exact same percentage of respondents saying conditions hadn’t changed.
The Reserve Bank of Australia (RBA) was given the thumbs up for its handling of inflation, with 67.3 per cent of respondents happy with how the central bank was managing monetary policy. This result, which was up from the 51.1 per cent recorded in October, was likely due to the bank’s decision to cut the official cash rate twice in the last quarter.
Just over half (50.3 per cent) said the current RBA official cash rate – which sits at 4.25 per cent – would have a positive impact on demand for residential property in the coming quarter. Around 44 per cent said it would have no impact.
In an annual forecast published in December, Laing+Simmons general manager Leanne Pilkington said declining interest rates would only go part of the way to boosting the local property market.
“The ramifications of the economic crisis in Europe will undoubtedly be felt in Australia, but exactly how and to what extent is difficult to predict,” Ms Pilkington said.
“As such it is difficult to forecast how the residential property market will perform over the next 12 months."
“A declining interest rate environment will support confidence, but this could be tempered by economic uncertainty and the potential impacts this could have on unemployment.”
Ms Pilkington added that the Reserve Bank will continue to play a crucial role in terms of monetary policy although ANZ’s announcement that it will undertake its own monthly interest rate reviews may undermine this.
“An argument can already be made that the RBA has insufficient power to effectively manage the economy and if the big four [banks] signal intentions to pay less attention to official cash rate movements, it is cause for concern," she said.
“Lower interest rates could prove the impetus many buyers need amid an otherwise uncertain economic environment, so the position taken by the banks will be closely scrutinised,” she said.
The Real Estate Business Quarterly Sentiment Survey is an online-based poll. The results to the latest survey were based on 171 replies, with the majority of respondents coming from the residential sales and property management sectors (84.7 per cent). More than half were principals (56.7 per cent) and licensees (12.9 per cent), and another 23.4 per cent were sales representatives.