Tasmania still in the doldrums

Confidence in Tasmania’s property industry has improved but is still amongst the lowest in the
nation, according to new research.

The latest Property Council-ANZ Property Industry Confidence Survey placed Tasmania at 86 on
the index for the September quarter – an improvement from 73 for the June quarter, but only
one point away from the nation’s lowest score.

The index score for the whole of Australia is 106. A score of 100 is considered neutral.
The survey polled more than 3100 professionals from the property and construction sector in
all states and territories for their forward-looking views.

Property Council Executive Director for Tasmania, Mary Massina, said it was the fourth
consecutive quarter of negative sentiment for the state’s property and construction industry,
and indicated the sector was still in the ‘confidence doldrums’.

“Despite the statistical bounce in sentiment upwards this quarter, there is no joy here for the
industry or the State Government,” Ms Massina said.

“Furthermore, across residential, tourism, retail and office sectors the industry in Tasmania is
predicting a stall in construction. Respondents believe only the retirement living sector will
increase construction activity for the quarter.

“Again, the survey highlights the fact that the same impediments to confidence – domestic and
economic conditions, state and federal political environments and planning controls – are
negatively influencing the state’s biggest private sector industry.”

ANZ Head of Property Research, Paul Braddick, agreed the outlook for Tasmania’s property
market was not positive.

“The pessimistic view reflects weak economic activity in the state, with a negative trend in
state final demand (-0.6 per cent in the year to March 2012), the unemployment rate
increasing to 7.3 per cent in May 2012 (from a low of 5.1 per cent in August 2011) and house
prices 7.5 per cent lower in the year to June,” he said.

“A subdued outlook for the Tasmanian economy for 2012-13 and weak construction activity
expectations presents some further downside risk to Tasmania’s property industry through the
remainder of 2012.”

Ms Massina said negative sentiment, combined with a lack of government reform in key areas
such as planning, was directly impacting on the decisions made by an important economic
driver to the state’s economy.

“In addition, the impending start of the new regressive stamp duty regime in October will be
weighing on investors’ minds,” she said.

“The reality is Tasmania needs to make up its mind whether it wants investment and job
creation, because the hallmarks of high unemployment – a 25 per cent drop in residential
construction combined with a fall in commercial construction of 20 per cent – would indicate
otherwise.

“The property industry wants more than the Government’s rhetoric on key micro-economic
reforms such as planning, water and sewerage and local government – we need to see
commitment and delivery.

“The Labor Green Government should recognise the property industry for what it is: 40,000
hard-working Tasmanians who pay taxes, buy houses, send their kids to school and who are
vital to Tasmania’s economy.

“They deserve recognition and support.”
Mary Massina, The Property Council