War and rising costs trigger property confidence plunge

Data showed that industry confidence has tumbled nationwide, dropping by 19 points to 104, marking the steepest quarterly drop since mid-2022 and dragging sentiment dangerously close to neutral territory.

Across the country, all capital cities experienced a drop in confidence, with NSW falling from 128 to 109 points, Queensland from 143 to 124 points, South Australia from 151 to 136 points, Victoria from 99 to 84 points, and Western Australia from 131 to 118.

Property Council chief executive Mike Zorbas said the survey highlighted widespread weakening, with economic concerns at their highest since 2020.

Additionally, he said the survey also showed that forward work had fallen across all regions, while construction sentiment had declined and housing growth expectations had sunk.

He said that weak industry confidence, driven by rising costs and supply chain pressures, will stall the conversion of approvals into completed homes and put the wider housing pipeline at risk.

“It would be a mistake to underplay such a sharp drop. Whether industrial, commercial or living sector, projects need both investor and consumer confidence to get them out of the ground,” Zorbas said.

With costs high and confidence fragile, Zorbas said that even small increases in uncertainty could delay projects before construction starts.

Similarly, he said that concerns over policy changes, such as a capital gains tax, can deter investors, reduce viable development, and ultimately limit new housing supply.

“Capital will go where it is welcome. Jacking up taxes on new housing investment would make shares more attractive.

“The total tax take on a new home is more than $3 in every 10. At a time when we need more homes, the solution is dropping taxes on long‑term investment in new housing,” he added.