THE outlook for the domestic LPTs market is not as rosy for the year ahead, and confidence in the unlisted trusts sector has tumbled.
According to the Australian Property Institute’s Directions Survey, a majority of respondents see moderate growth in domestic LPTs and unlisted trusts sector over the next 12 months.
In the survey, 68% of respondents see moderate growth in domestic LPTs compared to 66%, 3% predict strong growth and 16% see no change. Interestingly, the number of respondents forecasting a moderate fall increased to 13% in September 2007.
In contrast, 39% see strong growth in international LPTs and 55% predict moderate growth.
In the unlisted arena, 64% forecast moderate growth and 13% predict no change.
Meanwhile, confident of unlisted trusts providing strong growth has dipped from 31% in September 2006 to 13%.
The sentiment was shared for international unlisted trusts, albeit not as alarming.
There has been an increase in the view that growth will be unchanged from 10% a year ago to 23%. Also, just 42% and 29% see moderate and strong growth respectively – down from 52% and 35% respectively in September 2006.
Having said that, respondents are confident the non-residential property sector will outperform the equity markets in the short term.
The results show 23% believe it is very likely – up from 15% a year ago; 42% say likely and 16% believe the performance will be the same.
Those who think the sector will unlikely outperform equity fell from 27% to 19%.
But as time progresses, over the medium and longer term, confidence begins to wane.
Over the next three years, just 6% say very likely; 45% say likely; 13% say the same and a staggering 36% say unlikely.
And finally over the five year term, 3% say very likely; 23% say likely; 29% say the same (down from 59% in September 2006); and 42% say unlikely (up from 21%) whilst 3% say very unlikely.
Australian Property Journal
