The Australian economy projection in the 2021-2022 Mid-Year Economic and Fiscal Outlook (MYEFO) has presented a positive outcome, especially for the property market as we welcome in the new year.

The Australian economy projection in the 2021-2022 Mid-Year Economic and Fiscal Outlook (MYEFO) has presented a positive outcome, especially for the property market as we welcome in the new year.

Australia is well placed to deal with the challenges of the global pandemic as we achieve some of the best health and economic outcomes to date, and shows the economy is on track for a strong recovery, supported by a strong property industry employing more than any other sector.  

This should result in a surge in confidence and economic growth expectations, with the confidence Index rising 12 points nationally in the December quarter, showcased by boosts in the ACT (33 point increase), VIC (25 point increase) and NSW (9 point increase).

“These results show the industry is clearly optimistic about the state of the economy and commercial and residential property markets in the year ahead, having emerged from the challenges COVID-impacted last two years,” said Property Council of Australia Chief Executive Ken Morrison.  

“The uplift in expected economic growth from 1.5% in 2020/21 to 3.75% in 2021/22 is a major boost to the economy,” said Mr Hayden Groves, President of the Real Estate Institute of Australia.

“Together with a drop in the unemployment rate to 4.5% in 2021/22 and 4.25% in the following year, wages growth of 2.25% and 2.75% in those two years and then accelerating along with a CPI within the RBA’s target will be a positive for the property sector.

“For Australian’s considering buying or selling, this MYEFO should give them the encouragement to reach out to your local real estate agent to discuss your options,” Mr Groves said.

With announcements of the Federal Government’s plan to bring back ‘normal’ levels of net overseas migration a year earlier than forecast and then run at ‘catch up levels’ will be vital in supporting the economic recovery and addressing the skills cap currently being recorded.

“The reopening of state borders and easing of quarantine restrictions is clearly boosting confidence in the tourism property sector, while the rise in office occupancy has boosted sentiment in the office sector.” Said Felicity Emmett, Senior Economist ANZ. 

“Industrial property remains a clear winner through the pandemic though, with the shift to e-commerce lifting demand for warehousing and logistics property,” she added.  

Property Council WA Executive Director, Sandra Brewer, said many businesses were swinging in sentiment between optimism and pessimism as they seek to balance strong demand against staffing challenges and price escalations.

“Concerning skills shortages are causing real anxiety in the market, with businesses unable to plan growth or forward workflows with any confidence,

“The availability of skills and labour has been a critical concern for the property industry for most of 2021 and the problem has become even more acute in the past two to three months. Increasingly we are hearing of projects being at risk or placed on hold,” Ms Brewer said.

Heading into a federal election sometime this year 2022, the ANZ/Property Council’s latest survey signalled the sector’s critical issues requiring Federal Government attention.  

“Our industry’s key leaders are clearly saying housing supply and affordability is their number one issue, followed closely by emissions, environment and energy. Planned population growth is also of concern, given the industry clearly expects to be requiring more skilled workers,” Mr Morrison said. 

“Whilst all the signs are positive for the property sector, a long-term plan addressing the supply side is still needed.’ Added Mr Groves.

“Now is the time for Western Australia to be bold and assertive about growing migration. As a State, we have a long history of attracting high-quality expatriates to fill skills gaps,” Ms Brewer said.

Research conducted by the Property Council WA earlier this year revealed moving West is an attractive idea for many people in other parts of Australia. A survey of 800 Victorian and NSW residents showed 10 per cent of respondents were very or extremely likely to consider moving to WA.

“Never before has attracting talent to WA been so important, to ensure we continue on a positive economic path,” concluded Ms Brewer.





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