NSW’s property industry has taken a confidence hit as global fuel shocks, rising costs, and expectations of higher mortgage rates converge.
The latest Procore/Property Council Industry Sentiment Survey shows NSW confidence sliding to 109 index points in the March quarter, down from 128 in December but still above the national reading of 104.
“This survey was conducted between 9 and 27 March, right as global energy markets tightened and fuel price volatility surged,” said Property Council NSW Executive Director Anita Hugo. “The result is a sharp reset in confidence driven by costs and feasibility, not by a lack of demand for housing, commercial space, or investment.”
The softer industry mood mirrors a sharp slide in household and business sentiment: Westpac–MI’s Consumer Sentiment Index fell 12.5% in April to 80.1, the biggest drop since COVID‑19, while NAB’s March survey shows confidence at its lowest since April 2020. Westpac’s March Westpac–Melbourne Institute Leading Index also shows growth momentum dipping below trend, pointing to a softer economic backdrop through the rest of 2026 with rates remaining high.
The chartbook highlights a broad softening in expectations. Respondents across all states now anticipate poor national economic growth in the year ahead, and every market expects interest rates to rise further.
Debt finance availability expectations have also turned negative nationwide, with industry respondents expecting credit conditions to tighten over the next 12 months. Hugo noted that “NSW confidence has clearly taken a hit, but it remains in positive territory and above the national index. That tells us there is still appetite to invest and build in our state - however the industry is being squeezed hard by higher construction, financing, and operating costs.”
Despite the sentiment slide, capital growth expectations across NSW remain mostly positive, particularly in residential, industrial, retirement living, and hotels, even though they are softer than last quarter.
Housing supply and affordability remain the top issues industry wants governments to address, underscoring that underlying demand for new stock is still strong.
Hugo warned that “fuel is a critical input across construction, freight, and materials. When global shocks translate directly into higher local costs, the viability of new projects is hit almost immediately,” adding that “NSW respondents are telling us demand is there, but the numbers are not stacking up.”
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