UDIA REGULARLY SURVEYS THE INDUSTRY TO DETERMINE ITS VIEWS ON OPERATING CONDITIONS. IN THE SURVEY RELEASED LAST WEEK, THE RESPONSE WAS FAR FROM THE NEGATIVE OUTCOMES WE WERE ANTICIPATING DUE TO THE CONTRACTING MARKET.
In fact it was a relatively positive response with 81 per cent of respondents saying that workloads had stayed the same or increased compared to six months ago. The most positive responses were from planners and developers, which may indicate the inception of new projects ready for release on the upswing of the cycle. The other sector reporting an uplift in workloads was local government, however their drivers may be somewhat different from other respondents.
Only seven per cent of those surveyed anticipated any reduction in the workforce, with 24 per cent anticipating an increase over the next six months. There was also a 42 per cent increase, from the last survey, in the number of respondents believing that access to skills would be more difficult.
Sixty-seven per cent of respondents thought that prices will remain steady or rise in the next six months but respondents were divided on the short term sales outlook. Almost half thought sales would remain about the same or rise with just over half believing sales would fall further before the market cycle moved through the bottom and into upswing. Given that the Perth land market has only been in contraction since the record sales volumes recorded in the full year to December 2013, the relatively positive outlook could indicate that the market downturn could be shallower and shorter than others experienced since 2000.
Access to land remains a key issue with 95 per cent of respondents saying they found it as difficult, or more difficult, than six months ago. A massive 98 per cent said that the provision and funding of infrastructure was at least as bad with more than half saying it was worse than six months ago.
The good news was that, across the board, approval time lines were said to be improving. While agencies have been working hard and gains are being made, we need to consider these positive results in terms of volumes being processed. The real litmus test will be how the system copes at peak load and that is probably several years away depending on what happens with population growth.
Sentiment surveys, while useful early indicators, do not replace quantitative data for a thorough analysis of the property market.