The property industry remains overwhelmingly optimistic despite tougher lending conditions according to new Urban Developer and Development Finance Partners research.
Over 1000 respondents were questioned in the Q2-2017 Industry Sentiment Survey and over 75 per cent of them were either cautiously optimistic or very optimistic about the next 12 months.
The biggest issue facing those surveyed was obtaining construction funding and securing finance for pre-sale purchaser settlements.
Other issues for respondents were acquiring viable development sites, getting development approvals and obtaining development funding.
Managing director at Development Finance Partners, Baxter Gamble, told Broker News that property markets were resetting themselves across the country.
“Whilst funding conditions are getting tougher and access to credit is continuing to tighten, we are seeing that markets across the country are recalibrating from unprecedented levels of construction activity to more normal levels,” he said.
“Smaller developers are feeling the greatest pinch of APRA’s tighter banking controls which are starting to wash through the development sector and restrict new commencements.”
The Urban Developer’s Adam Di Marco said residential dwelling supply risks were contained to a number of ‘micro markets’ and that market fundamentals were solid everywhere else.
“The population of Australia’s capital cities continue to grow at some of the fastest rates in the developed world,” he told Broker News.
“Whilst we recognise the need to stabilise record levels of new supply, we also have major affordability issues, particularly in Sydney and Melbourne, which will only be exacerbated by a sustained period of low supply.”
“We can’t turn the tap off completely. We need to encourage a more sustainable level of new construction activity across individual markets based on a needs-based assessment of residential demand. We cannot simply cut our nose off to spite our face.”
“Australia’s next generation of home owners deserve a more sensible approach.”