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‘Housing affordability to worsen’ as industry confidence drops

By Jack Campbell
10 July 2024 | 11 minute read
mike zorbas pca reb xhaskv

The Property Council of Australia (PCA) has claimed that due to a cocktail of influences, housing affordability across Australia will worsen.

“High taxing, high spending state budgets on the east coast and interest rate concerns” are contributing to low confidence among PCA members. As a result, “housing affordability to worsen” read the industry body’s headline.

Industry confidence dropped over the June quarter, with the Confidence Index falling 14 points to 106 points nationally. According to the statement, a score of 100 is considered neutral.

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“Industry is glass half empty on economic growth at both state and national levels, based on high taxing state budgets on the east coast and uncertainty on interest rates,” said Property Council CEO Mike Zorbas.

“Economic growth expectations at both a state and federal level are in negative territory at -16 and -24, respectively, where zero is considered neutral. Confidence in our two largest states fell steeply with NSW down 18 points and Victoria down 14 points.

“This is a wake-up call – in the middle of a housing crisis, expectations for residential construction activity over the next 12 months are back below the historical average.”

Calling on better support in budgets, Zorbas believes effective policy is what will help turn this lack of confidence around.

“We need state treasurers to craft budgets that close these housing and city planning gaps. No wonder the sector’s expectations around housing price growth have risen to levels not seen since September 2021,” he said.

“Victoria’s property professionals are feeling as good as they were during the state’s second major pandemic lockdown, which further emphasises the need for the industry’s immense tax burden to be addressed.”

The statement highlighted Victoria’s economic growth expectations, describing it as “bleak” with a score 37 index points below average. In comparison, Western Australia scored 58 index points higher.

Compounding this was a poor confidence score across Victoria, falling 14 points to sit at 90 on the confidence index into “negative territory”.

Meanwhile NSW fell 18 points to 105, Queensland dropped 14 points to 106, ACT declined 2 points to 114, and South Australia decreased 18 points to 121.

Western Australia was the only state to see an increase in confidence levels, rising 2 points to 138.

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