Confidence at 11-year high

05th November 2007

Professionals working in the property industry are more confident now than at any time in 11 years that the residential market will see growth in the coming six months, a survey suggests.

Almost 73 per cent of respondents to Ashe Morgan Winthrop’s latest survey of investors and other property professionals tipped the residential market to climb, the strongest result in the 11 years of the bi-annual survey.

"After the doom and gloom of the past two years, we are now seeing a renewed confidence across the residential markets," Ashe Morgan Winthrop director John Winter said.

"This widespread confidence comes in spite of the fact that investors are expecting another interest rate rise. Property professionals have clearly already factored a rate rise into their investment plans, so when it happens there should be no cause for alarm."

The survey attracted 846 responses from large and small property investors, lenders and advisers. Property investment intentions were up slightly from the previous survey, with 62.7 per cent of respondents saying they were quite likely or definitely likely to invest in property over the next six months, 1.3 percentage points up from six months earlier.

The biggest impediment to investment remained a shortage of suitable stock, with 26 per cent of respondents listing that as a major problem.

Confidence was high in Queensland, with more than 84 per cent of Queensland respondents expecting the market to improve in the next six months and more than two-thirds intending to invest.

Ashe Morgan Winthrop said New South Wales saw the strongest resurgence of interest, with more than 64 per cent of the state's property professionals reporting they were likely to invest and just over 63 per cent saying they expected the residential market to improve. Victoria also saw a rebound in confidence.

Western Australia put in the weakest showing of the four largest states; only 59 per cent of respondents said they planned to invest in property in the coming six months and just 48 per cent preferred to invest in WA's residential market.

"According to our survey, most property professionals now agree the WA market has reached its peak," Winter said. "The state was saturated with investment following the resources boom and its small size now seems to be limiting further growth."

 

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