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More than 80 per cent of the real estate profession remains confident in the business market despite more challenging conditions facing the industry over 2023.
The Real Estate Industry Pulse 2022, from Optus Business and the Real Estate Institute of Australia, found that four in five survey respondents were confident for the next 12 months when quizzed in mid-2022.
Just under one-third (28 per cent) stated they were “very confident”, while half (53 per cent) stated they were “quite confident”.
While 1 per cent of those surveyed revealed they were “not at all confident”, a further 18 per cent stated they were “not very confident”.
With the report noting that the 275-basis-point total increase to the base interest rate is a “very direct challenge to the real estate sector”, it noted that the confidence levels directly opposed the pessimism seen elsewhere in the economy.
Zooming into business locations, the report also revealed that confidence remains extremely high in Western Australia. The state’s survey respondents were evenly split over their confidence levels: 51 per cent reported that they were “very confident” in the business marketplace, while 49 per cent stated they were “quite confident”.
It was a slightly different story in South Australia and the Northern Territory, where 6 per cent of respondents said they were “not at all confident”, while a further 20 per cent classed themselves as “not very confident”. Only 7 per cent of real estate professionals surveyed in the state and territory said they were “very confident” for the year ahead.
In Victoria, Tasmania and Queensland, one-quarter of the profession are “not very confident”, while three-quarters of the profession sit between “quite confident” and “very confident”.
In NSW and the ACT, more than half of real estate professionals are quite confident (55 per cent), while 27 per cent expressed themselves as “very confident” for the 12 months ahead.
Just 2 per cent considered themselves as “not at all confident”, while 16 per cent were “not very confident”.
When quizzed on the key challenges for the coming year, rate rises only rated as a potential impact for between 16 and 18 per cent of people surveyed.
Ranking higher as key challenges were time management (25 per cent), economic uncertainty affecting demand (24 per cent), and mental health concerns (24 per cent).
And key concerns aside, one-third of businesses are still gearing up for growth over the coming year, with more than one-third (36 per cent) of those surveyed revealing plans to grow their business over the coming 12 months.
So what are the biggest indicators of business confidence?
According to the report, the size of the business had an influence on “opinion and confidence”.
For the largest companies surveyed — home to between 101 and 300 full-time equivalent (FTE) employees — one-third (or 33 per cent) are “very confident”, while 64 per cent are “quite confident. Just 3 per cent are “not very confident”.
There were also greater instances of growth plans in place for the largest companies, with between 61 per cent and 67 per cent of larger companies aiming for growth across 2023.
At the other end of the spectrum, companies between zero to four FTE are showing the highest level of worry. With 1 per cent “not at all confident”, a further 18 per cent are “not very confident”.
That’s converting into less confidence for growth, with just 35 per cent of businesses employing between zero and four FTEs considering growth as a focus for the year ahead.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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