Hammer time for Melbourne apartments, but Sydney unit approvals continue decline: Pete Wargent

Hammer time for Melbourne apartments, but Sydney unit approvals continue decline: Pete Wargent
Hammer time for Melbourne apartments, but Sydney unit approvals continue decline: Pete Wargent

EXPERT OBSERVATIONS

Building approvals held up well in April 2018, still tracking at 19,000 per month in trend terms.

It's still very much hammer time for Melbourne apartments, but Sydney unit approvals continued their decline to sit at the lowest level since August 2015. 

 

I've been watching the budding Hobart supply response with mild interest, as well as noting some of the subdivisions and, shall we say, rather ambitious sticker prices for townhomes.

And like many things in Tassie, the supply response been rather slow.

That said, it is now happening, with annual approvals at an 82-month high in rising to the highest level since June 2011. 

 

 

Overall, the headline numbers were pretty good, thanks to more houses and semis now being approved, notably following population flows into Melbourne and Greater Brisbane, while Perth finally recorded a bit of an uptick, having fallen so sharply since December 2014. 

 

Annual house approvals in Perth are 45 per cent below their 2014 peak, but the sentiment and the clouds appear to be lifting a little. 

Summarily, pretty solid then.But - and this is a fairly big but - many apartment projects seem to be struggling with pre-sales and therefore with financing, and in turn the residential construction cycle appears set to fade.

There is already a record number of apartments approved and not yet commenced, especially in Sydney, and approvals to non-resident approvals have been curbed dramatically.

Queensland infrastructure lift-off.

The total value of building approved remained strong in the month at more than $10 billion, but arguably a fair chunk of that residential building work approved will never see the light of day, and non-residential approvals are now sliding too.

The one shining light is Queensland, where all the talk of commercial projects is now finally translating into action stations.

However, the sugar-hit for Melbourne and Sydney eventually looks set to wear off.

Overall, then, these figures appear consistent with the construction cycle rolling over this year.

Pete Wargent

Pete Wargent

Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.

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