Confidence across New South Wales’ property industry has fallen for a fourth consecutive quarter, as businesses grow more cautious about economic conditions, project feasibility and future development activity.
The latest Procore/Property Council Industry Sentiment Survey recorded a NSW confidence index of 84 in September, down from 89 in June and well below the 129 recorded in September 2025.
A reading below the survey’s neutral benchmark of 100 indicates that negative sentiment among respondents outweighs positive sentiment.
Confidence Continues to Weaken
The latest survey points to softer expectations across several areas of the property industry.
Respondents reported weaker outlooks for:
- Forward work schedules
- Employment
- Economic growth
- Property market conditions over the next 12 months
The Property Council said declining confidence could have consequences for future investment and project delivery, particularly where rising costs and weaker feasibility make new developments more difficult to progress.
Property Council NSW Executive Director Katie Stevenson said planning approvals were only one part of the challenge facing the industry, with financial viability remaining critical to whether projects ultimately move into construction.
Property Taxes and Charges Rank as Top Concern
Property taxes and government charges were identified by survey respondents as the highest-priority issue for state governments.
The Property Council argued that additional taxes, charges and infrastructure costs could further weaken project feasibility at a time when confidence is already under pressure.
The industry body has also raised concerns about proposed changes to the NSW Emergency Services Levy, warning that additional costs on commercial and industrial properties could flow through to businesses and households.
The Property Council recently gave evidence to the NSW parliamentary committee reviewing the proposed levy reforms.
NSW Housing Approvals Remain Below Target
The confidence results come as NSW continues to face pressure to increase housing supply.
According to the Property Council, the latest ABS data shows 52,776 homes were approved in NSW over the past year.
That remains below the more than 80,000 approvals a year the industry body says are now needed for NSW to meet its National Housing Accord target of 377,000 new homes by July 2029.
The latest monthly ABS figures also show NSW approved 4,586 dwellings in July 2026 on a seasonally adjusted basis, down 8.1 per cent from June.
Nationally, total dwelling approvals fell 3.6 per cent in July to 17,687, while private sector house approvals declined 4.2 per cent to 10,199.
Focus Shifts From Approval to Construction
The Property Council said recent planning reforms had helped improve the approval environment, but argued that stronger attention was now needed on whether approved developments remained financially viable enough to proceed.
Higher financing costs, taxes, infrastructure charges and construction expenses can all influence whether projects move from planning approval into construction.
The latest confidence survey suggests businesses are becoming increasingly cautious about future investment and hiring as those pressures continue.
With NSW facing a large housing delivery target through to 2029, the industry is calling for policy settings that improve project feasibility and reduce barriers between approval and construction.
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