Confidence levels in the South Australian property sector remain positive despite poor jobs data and low economic growth.
The Property Council/ANZ Property Industry Confidence Survey’s index for the September quarter of 2014, jumped four points to 114 – the second highest level since the survey’s inception in SA in 2011.
“The property industry confidence index in SA is still 16 index points less than the peak at the start of the year, however we have returned to growth,” said Property Council spokesman Lino Iacomella.
“We expect the real activity in the industry to actually pick up later in the year, probably in the lead-up to Christmas.
“The recovery is largely based on expectations of continuing low interest rates, and the likely boost this will provide the land development and housing construction sectors,” Iacomella said.
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“The survey also picked up a strong improvement in sentiment in the retail, industrial, hotel and retirement living sectors.”
Earlier reports that the commercial property sector remained in the doldrums have been backed up by the index.
“The commercial office sector is the only category that is not contributing to a positive outlook in industry sentiment,” Iacamello said.
“The overall improvement in business expectations within the property sector indicates that we have most likely passed the low point for the property sector in SA.”
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On the residential property front, low interest rates are keeping rental rates down.
RP Data’s national quarterly rental market report shows that over the first six months of 2014 house rents remained unchanged across the combined capital cities, while for units rents increased by 2.4 per cent.
Annually, house and unit rents increased by 2.4 per cent, just under the inflation rate, while at the same time vacancy rate data sourced from the Real Estate Institute of Australia (REIA) shows a fall in rates across a majority of the capital city markets over the March quarter.
Houses in Sydney, Brisbane, Adelaide, Darwin and Canberra all recorded no change in weekly rental rates over the quarter.
RP Data spokesman Cameron Kusher said rental growth has been relatively subdued since 2008 due to a number of factors such as stimulus from low interest rates and low returns on other asset classes and from savings accounts which enticed prospective new home owners into buying and eased demand for rentals.
Kusher said that based on today’s report, since June 2009, capital city house rents have increased by just 2.7 per cent annually, while units have performed slightly stronger with rents increasing by 2.8 per cent annually.
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