Confidence in NSW property industry continues to slide

The latest Procore/Property Council Survey found that, in September, the confidence score was 84, down from 89 in June and far under the 129 recorded in September 2025.

The result was also below the ‘neutral’ benchmark of 100, with more businesses across the state reporting negative conditions than positive ones.

According to Property Council NSW executive director, Katie Stevenson, confidence in the investment environment continued to weaken, despite sustained commitment to delivering homes, workplaces and infrastructure.

She said while NSW had made progress on planning reforms and housing supply, getting projects approved was just part of the challenge.

“Projects only become homes, workplaces and community infrastructure when the economics stack up, and right now many businesses are becoming more cautious about the road ahead,” she said.

The survey indicated significant declines in expectations for forward work schedules and employment, suggesting emerging concern about future project activity.

Stevenson said industry confidence was important as it drove investment in the sector.

“When confidence falls, projects take longer to proceed, investment decisions become harder, and housing delivery becomes more challenging,” he said.

Additionally, the results showed that survey respondents identified state property taxes and charges as the highest priority issue for state governments to address.

According to Stevenson, policymakers should extensively think about the impact of additional costs on property sector investment confidence and housing delivery.

She said governments should be looking for ways to improve the economics of development, not making them more difficult, at a time when confidence was already under pressure.

“That includes carefully assessing any proposal that increases costs across the property sector and the broader economy,” she said.

Additionally, Stevenson said the NSW government’s proposed changes, which would replace the current Emergency Services Levy (ESL) with a broad-based property levy, would further impact the industry.

“These reforms, as proposed, could impose significant additional costs on commercial and industrial properties, with flow-on impacts for businesses and households,” she said.

She said whether the topic was charges, infrastructure costs or financing conditions, there was always an underlying issue that projects were processed when they were financially viable.

“If we want more housing, more jobs and more investment, we need policy settings that encourage confidence and support delivery,” she said.

The survey results came after the Australian Bureau of Statistics (ABS) Building Approvals data for July showed that in NSW, there were 52,776 homes approved over the past year.

Stevenson said the figure was well short of the more than 80,000 required annually to meet the state's National Housing Accord target of 377,000 new homes by July 2029.

“The ABS data shows the scale of the housing task facing NSW,” Stevenson said.

“The sentiment survey results show why keeping a strong focus on project feasibility and delivery is so important – we need to make sure projects can move from approval to construction.

Ultimately, Stevenson said the government had taken positive steps on planning reform and feasibility, but there was still more work to do.

“The message for government is, keep improving the investment environment, keep removing barriers to delivery and avoid adding costs that make housing and development harder to deliver.”