Concern about the risks of development has become paramount in the minds of builders and developers as the latest Sentiment Monitor produced by national property consultants Davis Langdon plunged to its lowest ever level.

During the past six months, the Davis Langdon’s Construction Sentiment Index fell 28 points to reach 70 – the largest fall since the commencement of the survey in 2006, leaving the index at its lowest point yet.

According to Davis Langdon’s national research manager, Rachel Kelloway, risks of development shot several places up the list of concerns to become the second greatest obstacle, and there are expectations that this will worsen during the upcoming 12 months.

“Obtaining finance, which has sat near the bottom rung since the commencement of this survey, has clearly started to seriously concern participants,” said Ms Kelloway.

“Previously posing the least concern to industry players, the issue leapt three places to become the sixth greatest obstacle in the industry – with a view to significantly worsening conditions during the upcoming 12 months.

“If participant’s forecasts are correct, obtaining finance will be one of the top two obstacles in building development by this time next year.”

Interest rate volatility has also become a significant obstacle to the construction industry.

“Survey participants hold a general consensus that the worst is yet to come, which indicates to us that the Reserve Bank’s recent interest rate reprieves have still not managed to reverse sliding industry sentiment,” said Ms Kelloway.

“However, there are some positives to come out of this latest survey.

“Skill shortages are now no longer an issue in the industry. Skills shortages eased 8.1 per cent since last survey, indicating some generous relief for the industry.

“For the first time since the commencement of the survey, every respondent reported experiencing fewer skilled trades or professionals in short supply.

“Town planning approval, previously ranked as the second greatest obstacle, slid back down the list two places, to become the fourth greatest obstacle, despite the fact that approval timeframes have in fact worsened, according to respondents.

“It is possible that planning, rather than becoming a lesser obstacle, is just becoming the least of the industry’s concerns.”

Expectations about general industry workload slid further during the past six months.

Nationally, 25 per cent of respondents now expect industry workload to reduce over the next 12 months, up 13 per cent since last survey and 22 per cent higher than a year ago.

At the same time, respondents expecting workload to increase over the next 12 months plummeted to reach just 19 per cent - down 43 per cent on the same time last year. Only about half of survey participants expect workload to remain relatively stable over the next 12 months.

For further information, contact Meaghan Jones on +61 3 9933 8800 or email mjones2@davislangdon.com.au