Sector Confidence Steady but Reform Calls Grow Louder

Property industry confidence stayed steady in the June quarter amid mounting pressure on governments to address planning reform, tax changes and investment rules.

The Procore/Property Council Survey for the period shows the national Confidence Index held at 124 points, just one point below the March result.

The survey of 581 property professionals shows continued optimism across the sector despite broader economic uncertainty. Any score above 100 is considered positive.

Property Council chief executive Mike Zorbas said the results showed the industry remained strong but governments needed to act.

“The property industry is holding its nerve, but we need governments to get serious about tax and investment settings that will help Australian businesses attract overseas capital partners for the assets our cities need,” Zorbas said.

The survey showed growing frustration with slow planning systems and tax policies that discouraged local and international investors.

Industry concerns about tax reform jumped 20 per cent higher than the previous quarter, the highest level since June of 2020.

This reflected growing frustration with outdated tax settings that limited the supply of new homes, offices, and industrial properties, Procore said.

State governments have faced criticism over foreign investment taxes. Those taxes, industry leaders said, were putting off institutional investors needed for urban development.

“At a time when state governments have run out of money, taxes on foreign investment deter patient institutional investment that we need to build our cities,” Zorbas said.

Housing supply and affordability remained the top concern for federal and state governments across all states.

Forward work expectations dropped in every state except Queensland, showing potential softening in future project pipelines, particularly in Victoria and the ACT.

All markets recorded residential capital growth expectations above their historical averages, while industrial capital values are expected to increase nationally.

▲ Property Council of Australia chief Mike Zorbas: Industry is holding its nerve.

Construction activity levels are expected to remain positive across the sector.

However, office markets face challenges, with Victoria and ACT respondents expecting office capital values to decline.

Retail had mixed results—the ACT was the only market where retail capital values were expected to decline.

All markets expect interest rates to fall over the next 12 months, and for debt finance availability to improve in all states except Western Australia.

Staffing expectations rose in most markets, reflecting ongoing demand for skilled labour despite pockets of softening in some regions.

Government performance confidence remained low. Only South Australia recorded positive sentiment federally, while just South Australia and Queensland have positive scores at state level.

Zorbas said policy reform was still critical for the sector’s future growth.

“This survey also reminds us that planning reform is the single biggest productivity lever available to governments. We must streamline planning and environmental approvals, reduce red tape, and enable faster delivery of housing and infrastructure,” he said.

“This is a capital-intensive industry and Australia will need to continue attracting institutional investment to build the next generation of housing, workplaces and community infrastructure.

“That means streamlining investment pathways and scrapping counterproductive taxes on foreign capital if we want to stay competitive.”