Hotels buck trend as property sentiment dips
The commercial property industry is slightly less optimistic overall as confidence edged lower in the buoyant NSW and Victorian office markets, according to a NAB survey.
Sentiment fell for the second straight quarter, losing five points to +18, but remains well above the long-term average, according to the NAB Commercial Property Index for the third quarter.
NAB group chief economist Alan Oster highlighted the variation between the eastern seaboard and mining-affected states.
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“Overall sentiment was dragged down by NSW (+34) and Victoria (+29), but they continue to out perform,” Oster says. “Sentiment rose in WA (-29) and SA/NT (-15), but is still very weak, with Queensland (+15) steady.”
NAB chief economist Alan Oster.
The most positive sector was CBD hotels, while the trend of rising sentiment in the office sector reversed overall and edged down in the strong states of NSW and Victoria, despite increases in WA.
Confidence in the retail sector rose as concerns about the outlook for retail have been in focus amid cautious consumers and the trend to online commerce.
Participants lifted their expectations for capital growth across all sectors. Offices are likely to provide the best rent growth while retail rents are expected to soften over the next 12 months.
The number of developers planning to start new building works rose from the last survey, but remains below its long-term average, consistent with NAB’s view that dwelling construction may have already peaked.
This article originally appeared on www.theaustralian.com.au/property.
