UDIA UNDER TAKES AN INDUSTRY SENTIMENT SURVEY WHICH COLLATES THE OPINIONS OF PEOPLE WORKING IN THE SECTOR ABOUT THEIR WORKLOADS, THE APPROVALS SYSTEM AND THE OUTLOOK FOR THE MARKET.
Compared to the two recent surveys, which were extremely bullish, the sales growth outlook is weaker. In April 2013 75% of respondents believed that there would be an increase in sales, with just over half holding that view in October 2013. Only 17.9% felt sales would rise over the next six months in the current survey but that needs to be looked at in the context of record sales of developer lots and the normal winter downturn. Overall, the outlook was steady with the majority believing that sales will remain about the same or increase.
This outlook is supported in our weekly market snapshot data showing the normal winter dip in sales but the market recovering in July to the trend levels recorded in March. With low interest rates it is likely that the market will continue to “tick along” for some time yet.
The survey revealed that significantly more respondents believe the prices will stay about the same over the next six months than those who thought it would change. Of those respondents that thought prices would change, there was virtually an even split between those thinking prices would rise and those backing a fall.
For those of you working in the industry the news is positive with workloads in the residential development industry trending upwards with nearly half experiencing uplift in the last six months and 22% expecting further increases in the next six months. The building, planning and development sector are all on the increase, with local government recording the highest rise in forecast workloads.
The challenges facing the industry are no surprise. Uncertainty around Council mergers was a key concern due to the potential short term impact the amalgamation process could have on overall approvals timelines, fees and general services.
Industry recognised the progress made to speed up internal processes and provide faster turnaround of approvals (at both state and local government levels), however it seems the improvement has a long way to go with 96% of respondents believing that the planning and regulations process has either stayed the same or become more difficult over the last six months.
Only time will tell if these views are correct. Our quarterly land sales survey will be released in August, keep your eyes open for the Land Report Liftout in the West Australian.