<p>Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.</p>

<p>Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;</p>

<p>David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;</p>

<p>“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;</p>

<p>[smartcode_project:default project_id=110291 project_image_fid=302785]</p>

<h2>Affordable product leads, premium demand remains resilient</h2>

<p>Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;</p>

<p>Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;</p>

<p>At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.</p>

<p>Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.</p>

<p>Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364102]</p>

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

<p>Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.</p>

<p>David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.</p>

<p>“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;</p>

<p>Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.</p>

<p>[smartcode_project:default project_id=108869 project_image_fid=317905]</p>

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

<p>While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;</p>

<p>Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;</p>

<p>However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.</p>

<p>Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;</p>


Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<p><a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.</p>

<p>The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.</p>

<p>Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.</p>

<p>“Brisbane was the right step for Sammut,” Sammut said.</p>

<p>“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" /></p>

<p>Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.</p>

<p>The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.</p>

<p>“We are DA approved now which is very exciting,” Sammut said.</p>

<p>“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" /></p>

<p>Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.</p>

<p>“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.</p>

<p>The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.</p>

<p>“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”</p>

<p>The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.</p>

<p>The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.</p>


Sammut secures approval for debut Brisbane apartment development in Toowong

<p>Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.</p>

<p>Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.</p>

<p>The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.</p>

<p>“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.</p>

<p>“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.</p>

<p>“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”</p>

<p>The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.</p>

<p>“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”</p>

<p>From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.</p>

<p>“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”</p>

<p>The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.</p>

<p>“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.</p>

<p>Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.</p>

<p>“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.</p>

<p>“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”</p>

<p>The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.</p>

<p>“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.</p>

<p>Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.</p>

<p>&nbsp;</p>


Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

<p>Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.</p>

<p>With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.</p>

<p>“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.</p>

<p>“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" /></p>

<p>&nbsp;</p>

<p>One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.</p>

<p>Green praised local policy settings.</p>

<p>“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


One Living enters Sydney's new apartment market with Northern Beaches site acquisition

<p>It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.</p>

<p>Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.</p>

<p data-end="882" data-start="690">"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.</p>

<p>The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.</p>

<p>Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.</p>

<p>The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.</p>

<p>WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.</p>

<p>With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

Building Approvals

j.ballantyne1990-6AQqhLzZaK

September 2017 RBA minutes note building approvals have stepped down 

<html><body>
<p>Australia's privatised building certifiers are worried over insurers’ moves to exclude liability for non-compliant cladding in the wake of the London building fire tragedy.</p>
<p>The Australian Institute of Building Surveyors, the peak body for Australia's privatised building certifiers, has written to members that some professional indemnity insurers were imposing 'onerous exclusions' to policies around non-compliant cladding, The Australian Financial Review reported.</p>
<p>"Some clauses exclude claims arising out of 'non-compliant' aluminium composite cladding whereas others exclude "non-compliant" and "non-conforming" cladding or building materials generally," the emailed letter said. </p>
<p>"The exclusions that we have seen are broadly worded, removing all cover when non-compliant products exist irrespective of whether the insured practitioner caused or contributed to the issue."</p>
<p>Melbourne-based insurance broker BRIC, which advised the institute to send the email, noticed its first policy with an exclusion clause in February. </p>
<p>Since June, it has had to find alternative insurers for 12 clients whose existing insurers had refused to remove exclusion clauses.</p>
<p>The exclusion clauses pose a major risk for professionals such as building surveyors and engineers, BRIC broking manager Darren Pavic was cited by the AFR as saying.</p>
<p>"If a policy does not respond to a claim, the firm and the individual practitioner will be left to defend the matter using their own resources," Pavic said.</p>
<p>Flammable cladding has been a major issue since London's Grenfell Tower tragedy. </p>
<p>The Victorian government has set up a the taskforce to speed up the investigation into the use of flammable cladding on high-rise buildings in the state.</p>
<p>It has also prompted a revision of Australia's National Construction Code. </p>
<p>The move by insurers has also been prompted by the fire at Melbourne’s Lacrosse building in the Docklands.</p>
<p>Moves by state governments, such as in NSW, and by developers and owners themselves to determine the safety of their cladding are likely to lead to a raft of claims over rectification costs, said Scott Higgins, a partner with law firm Mills Oakley. </p>
<p>With developers likely to have confidential dispute resolution mechanisms that would have them resolve problems privately, bodies corporate were more likely to take certifiers to court, Higgins said.</p>
<p>"I'd be very surprised if we didn't start to see them in the next six months," he said.</p>
<p>Erik Adriaantse, the interim chief executive of industry body Strata Community Australia, said news of the exclusions was a "positive" development.</p>
<p>"It's likely to put pressure on certifiers to get it right," he said.</p>
<p>Higgins added that the move by insurers could influence the appetite of building owners to rectify them.</p>
<p>"If you have to rectify the issue and seek to recover the costs – which could be in the millions – by reclaiming those under insurance, if that certifying authority doesn't have an insurer standing behind them there's less comfort there that you're going to be able to recover the costs," he said.</p>
</body></html>

jonathanchancellor-7SQnKwU6yx

Certifiers, building owners at risk from insurer cladding exclusion rules

<html><body>
<p>The building approvals in the current cycle began to rise from mid-2012, according to HIA’s latest report.</p>
<p>It took until late 2015 for the cycle to peak and approvals have subsequently maintained very high levels from a historical perspective.</p>
<p>Australia’s latest new home construction cycle, for which building approvals formed a very accurate lead indicator, is the longest and largest in the nation’s history.</p>
<p>This has produced very healthy outcomes for the broader Australian economy.</p>
<p>The December 2016 numbers for ABS Building Approvals (the latest available data) confirm that we have passed the peak for this cycle.</p>
<p>However, actual residential construction activity will remain healthy throughout 2016/17 and into 2017/18 due to the continuing gap between building approvals and new dwelling commencements (starts).</p>
<p>In monthly terms building approvals peaked in October 2015 at a level of 21,546.</p>
<p>The annual peak for building approvals was a staggering 241,561 over the 12 months to November 2015.</p>
<p>In calendar year 2016 building approvals reached a level of 230,813 compared to 240,009 in 2015.</p>
<p>A gradual decline in building approvals in the early stages of the down cycle provides an important signal for the Australian economy.</p>
<p>This trend is consistent with continued healthy levels of new dwelling commencements and residential work being done in 2016/17 and into next year.</p>
<p>This situation in turn provides positive impacts on economic growth and employment.</p>
<p>For example, construction absorbs 9 per cent of the workforce and is the third largest employer, after health (12.8 per cent) and retail (10.5 per cent) in the Australian economy.</p>
<p>Record levels of residential construction and related jobs have in recent years offset job losses in other sectors.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/21/HIA-1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/21/HIA-1.jpg" alt=""></p>
<p>There was considerable variation in the evolution of dwelling approvals among the states in 2016 compared to 2015.</p>
<p>This is not a surprising finding – this building cycle has been marked by larger than normal divergenes in housing conditions around Australia given that the up-cycle began before Australia’s largest ever resources investment boom had peaked.</p>
<p>In original (i.e. not seasonally adjusted) terms three out of eight states recorded increases in total building approvals in calendar year 2016.</p>
<p>The strongest increase occurred in the Australian Capital Territory (+44.6 per cent), followed by South Australia (+3.8 per cent) and New South Wales (+1.2 per cent).</p>
<p>Total building approvals declined in Western Australia and the Northern Territory (-23.4 per cent in each instance), Tasmania (-23.0 per cent), Queensland (-5.9 per cent), and Victoria (-1.3 per cent).</p>
<p>Comparing the December 2016 quarter to the December 2015 quarter, there was a decline in approvals nationwide of 14.2 per cent (in unadjusted terms, see chart below).</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/21/HIA-2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/21/HIA-2.jpg" alt=""></p>
<p>Different jurisdictions played varying roles in this overall result.</p>
<p>The main drivers of this annual change in the December 2016 quarter were New South Wales (-6.4 percentage points) and Queensland (-4.9 percentage points).</p>
<p>Contractions were also evident for: Western Australia (-1.5 percentage points); and Victoria and South Australia (-0.9 percentage points in each instance).</p>
<p>Tasmania had a minor - 0.1 percentage point result.</p>
<p>In terms of the number of building approvals, the decline in NSW (-3,884) acted as a large drag on the national outcome (-8,560).</p>
<p>The following analysis provides greater detail on developments in approvals for different dwelling types.</p>
<p>This breakdown of building approvals – separating out semi-detached style product from medium/high density (MHD) units, for example provides important ‘colour’ to the building approvals landscape and is often forgotten in generalised commentary regarding detached houses ‘versus multi-units’.</p>
<p>Let’s start from the top with the aggregate profiles to provide the necessary background.</p>
<p>The chart below shows monthly changes in seasonally adjusted approvals.</p>
<p>There were 51,173 total seasonally adjusted building approvals in the December 2016 quarter, a level 15.2 per cent lower than approvals in the September quarter.</p>
<p>As previously noted, building approvals were 3.8 per cent lower in 2016 than in 2015.</p>
<p>Seasonally adjusted building approvals for detached houses totalled 28,275 in the December 2016 quarter, a level 2.2 per cent lower than in the September quarter of 2016.</p>
<p>Total approvals for ‘other dwellings’ – usually referred to as ‘multi-units’ numbered 22,900 in the December 2016 quarter.</p>
<p>That level was 26.9 per cent lower than the approvals in the September quarter of 2016. In the 12 months to December 2016 approvals were 5.5 per cent lower than in 2015.</p>
<p>The overall profile for detached house approvals in 2016 suggests this segment of the new home building market remains in relatively healthy shape in early 2017.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/21/HIA-3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/21/HIA-3.jpg" alt=""></p>
<p>Drilling down from this aggregate profile we consider five categories of residential building approvals.</p>
<p>Comparing the December 2016 quarter to the same period in 2015, all of the five categories of dwellings recorded a decline in approvals: detached houses (-5.8 per cent); semi-detached, row, terrace or townhouse homes (-10.1 per cent); flats or units in 1 or 2 storey buildings (-21.9 per cent); flats or units in 3 storey buildings (-25.8 per cent); and flats or units in 4 or more storey buildings (-27.4 per cent).</p>
<p>All the categories combined recorded a national decline of 14.2 per cent.</p>
<p>In terms of last calendar year, all categories except semi-detached, row or terrace dwellings posted a negative change.</p>
<p>Building approvals in the ‘semi-detached’ category increased by 3.8 per cent in 2016.</p>
<p>The remaining categories posted declines in 2016 of: detached houses (-1.9 per cent); flats or units in 1 or 2 storey buildings (-27.1 per cent); flats or units in 3 storey buildings (-7.7 per cent); and flats or units in 4 or more storey buildings (-7.5 per cent).</p>
<p>The chart below shows how approvals for each of the different dwelling types have been contributing or detracting from total growth in the number of building approvals in a quarter over the same quarter a year ago.</p>
<p>Clearly, up to the December 2016 quarter, approvals for all categories have driven declines in aggregate approvals, but to a widely varying extent.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/21/HIA-4.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/21/HIA-4.jpg" alt=""></p>
<p>Detached house approvals</p>
<ul>
<li>51.2 per cent of total building approvals in 2016 compared with the decade average of 60.9 per cent;</li>
<li>A significant 5.8 per cent decline during the three months to December 2016 to reach a (non- seasonally adjusted) level of 27,610. This level is 13.8 per cent lower than in the December 2015 quarter;</li>
<li>Average monthly approvals of 9,735 dwellings over 2016 in unadjusted terms;</li>
<li>Eastern seaboard states the primary geographical drivers of growth in 2016.</li>
</ul>
<p>Semi-detached and townhouse approvals</p>
<ul>
<li>14.6 per cent of total building approvals in 2016 compared with the decade average of 13.5 per cent;</li>
<li>Average monthly approvals of 2,781 dwellings over 2016, in unadjusted terms;</li>
<li>Strong 3.8 per cent growth in 2016, driven by the eastern seaboard states;</li>
<li>Queensland, the Australian Capital Territory, the Northern Territory and Victoria contributed to aggregate growth nationally;</li>
</ul>
<p>Approvals for units in 1 or 2 storey buildings</p>
<ul>
<li>1.4 per cent share in 2016, compared with the decade average of 2.9 per cent;</li>
<li>Average monthly approvals of 271 dwellings over 2016, in unadjusted terms. Growth driven by South Australia and the Australian Capital Territory, but declines elsewhere.</li>
</ul>
<p>Approvals for units in 3 storey buildings</p>
<ul>
<li>2.2 per cent share in 2016, compared with the decade average of 2.5 per cent;</li>
<li>Average monthly approvals of 426 dwellings over 2016, in unadjusted terms;</li>
<li>Decline of 7.7 per cent in 2016;</li>
<li>Annual decline a result of pull-backs in New South Wales and the Northern Territory. Growth in Victoria and South Australia was insufficient to offset the declines.</li>
</ul>
<p>Approvals for units in 4+ storey buildings</p>
<ul>
<li>30.5 per cent share in 2016 compared with ten year average of 20.1 per cent;</li>
<li>Average monthly approvals of 5,826 dwellings over 2016, in unadjusted terms;</li>
<li>Some slow-down in 2016, driven mainly by Victoria, Queensland and the Northern Territory. The Australian Capital Territory and New South Wales were the two star contributors to growth.</li>
</ul>
<p>Australia’s new home-building boom looks set to taper off from 2017.</p>
<p>Building approvals for new housing have faded (moderately) in the past year, but they didn’t tank.</p>
<p>ABS building approvals figures show that the number of houses and ‘other dwellings’ approved in 2016 were lower than in 2015 by less than 4 per cent.</p>
<p>This outcome is not a precursor of any serious declines in new dwelling commencements in the first half of 2017.</p>
<p>The steady trend in detached house approvals suggests that actual activity will similarly remain reasonably healthy in the short term.</p>
<p>A slightly more positive short term outlook applies to semi-detached type approvals.</p>
<p>Overall, we retain our long held outlook for continued healthy levels of new home construction in 2016/17, and to a lesser extent in calendar year 2017:-</p>
<p>Detached house construction will remain healthy in the short term, but the volume of building will be lower than last year;</p>
<p>The semi-detached market has some further growth to it in the first half of 2017 – a tick in the box that shouldn’t be missed;</p>
<p>The pipeline of work in progress is substantial, particularly in terms of medium/high density dwellings.</p>
<p>HIA Economics will shortly be releasing their latest forecasts for dwelling commencements.</p>
<p>This release will include updates for the subscription products of: dwelling starts composition forecasts; regional building approvals forecasts; and long term forecasts.</p>
<p>For further information go <a href="https://hia.com.au/en/BusinessInfo/economicInfo/housingForecasts.aspx" target="_blank">here</a>.</p>
</body></html>

New home building approvals in longest and largest cycle in Australia's history

<html><body>
<p>The December 2016 update for ABS Building Approvals confirms the peak for the cycle has passed, according to the Housing Industry Association.</p>
<p>“While a downward trend in building approvals is firmly entrenched, residential construction activity itself will hold up well throughout 2016/17,” said HIA chief economist, Dr Harley Dale.</p>
<p>“From 2017/18 we will see a sharper decline in new home building activity, primarily due to the medium/high density segment of the market.</p>
<p>"Building approvals peaked in July 2016, but by December last year were only 18 per cent lower than that peak.</p>
<p>"Given approvals reached an all-time high last year that’s a modest fall – we can take that away and bank it as a good outcome for the Australian economy.</p>
<p>"This has been an extraordinary cycle for new home building – the biggest and longest in history."</p>
<p>He said a long tail to the cycle will be helpful for the Australian economy.</p>
<p>Dr Dale said it was important to focus in 2017 on ensuring Australia has the correct longer term policy settings to ensure we adequately house our growing and ageing population.</p>
<p>The recent appointment of Michael Sukkar as Assistant Minister to the Treasurer, with a focus on housing affordability allows the Federal Government to lead from the front in meeting this crucial national objective.”</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/02/Screen%20Shot%202017-02-02%20at%202.34.22%20pm.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/02/Screen%20Shot%202017-02-02%20at%202.34.22%20pm.jpg" alt=""></p>
<p>In December 2016 total seasonally adjusted building approvals fell by 1.2 per cent with detached houses down by 2.2 per cent and ‘other dwellings’ sitting flat at +0.1 per cent.</p>
<p>On a three month annualised basis total approvals remain above the 200,000 threshold at 204,692.</p>
<p>In December 2016, seasonally-adjusted building approvals increased by 19.5 per cent in Tasmania and 17.0 per cent in Victoria, while in trend terms there was an increase of 1.2 per cent in the Northern Territory.</p>
<p>Building approvals fell in Western Australia (-16.3 per cent), New South Wales (-13.2 per cent), South Australia (-5.4 per cent), and Queensland (-0.1 per cent).</p>
<p>In trend terms approvals fell by 2.1 per cent in the Australian Capital Territory.</p>
</body></html>

Peak of the building approvals cycle has passed: HIA

<html><body>
<div>
<div>
<div>
<div>The NSW Department of Planning will be able to step in if councils or other government agencies sit on residential approvals for too long under new laws.</div>
<div> </div>
<div>Aimed at relieving Sydney's chronic housing shortage, the proposed changes will see the Planning Minister also have the right to set up a planning panel on councils that are stalling on a project decision.</div>
<div> </div>
<div>It is a system already operating in South Australia. </div>
</div>
</div>
</div>
<div>
<div id="content">
<div>
<div>
<div>
<div>
<p>The NSW development approval system has previously been labelled the worst in the world by the Property Council of NSW.</p>
<p>The Daily Telegraph had Prime Minister Malcolm Turnbull last week saying Sydney councils were taking three times as long to approve DAs as their counterparts in Brisbane.</p>
<p>The proposed changes include standardising the format of councils' development control plans, removing 400 formats that exist across the state.</p>
<p>Developers will also be given incentives, yet to be detailed, to resolve objections with neighbours before lodging development approvals.</p>
<p>It is expected to save time and money, and increase harmony, though the Australian Financial Review noted NSW Planning Minister Rob Stokes' department provided details of the legislation to the paper on the condition no groups such as Greens and local councils would be approached for comment. </p>
</div>
<div>
<p>NSW Urban Development Institute of Australia chief executive Steve Mann, in comments supplied by the NSW government, said the reforms addressed some long-held frustrations with the planning system by industry, community and local government.</p>
</div>
</div>
</div>
</div>
</div>
</div>
</body></html>

jchancellor-FAypfDUnLy

NSW to hasten residential approvals with new planning rules

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">GUEST OBSERVER</div>
<div class="column">
<br>The latest construction data was certainly disappointing. Not only is construction work down over 11 percent on a year ago, but the falls were across an array of sectors.</div>
<div class="column"> </div>
<div class="column">Engineering and commercials continued to record the brunt of the weakness, while residential construction also fell from record highs. In addition the major states all recorded a fall in construction activity, with gains only in ACT, Tasmania and the Northern Territory.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/11/24/Screen%20Shot%202016-11-24%20at%208.51.47%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="/images/2016/11/24/Screen%20Shot%202016-11-24%20at%208.51.47%20AM.png" alt=""></div>
<div class="column">
<p>The ‘baton pass’ from engineering to residential building was clearly the driver of activity over the last couple of years. In fact engineering work is down by 23.2 percent on a year ago – just shy of the biggest annual fall on record, as opposed to residential construction, which eased from record highs. The results are even more staggering when you consider that just over two years ago engineering work surpassed total building (residential and commercial) by more than $9 billion.</p>
<p>And while policymakers would not be overly concerned at present, a substantial pullback in residential activity would create a void that could cause concern. Essentially the hope would be that commercial and non-mining related business investment will lift over the coming year and provide the economy with a lift in momentum.</p>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">Inflation in the building sector is healthy without being excessive. Not only was inflation flat in the September quarter but the annual rate of construction inflation eased back to 2 per cent. Interestingly recent construction industry reports forecast a rise in hourly rates over the medium term at unionised building sites due to new enterprise bargaining agreements and labour shortages.</div>
<div class="column"> </div>
<div class="column">In addition recently signed agreements suggest a 20 percent lift in wages over the next 4 years on some sites. Overall a lift in inflation in the building sector would not concern the Reserve Bank at present given the lack of inflation across the rest of the economy.  </div>
<div class="column"> </div>
<div class="column">Today’s data is unlikely to alter the Reserve Banks thinking when it comes to rates. Focus now turns to the June quarter business investment data released on December 1. And while the Reserve Bank will be particularly interested in estimates of completed non-mining investment, there will be a much greater focus on future spending plans - especially in light of the fact that private sector construction activity continues to disappoint.</div>
<div class="column"> </div>
<div class="column">What do the figures show?</div>
<div class="column"> </div>
<div class="column">Construction Work</div>
<div class="column">
<br>Construction work done fell by 4.9 percent in real (inflation-adjusted) terms in the September quarter after sliding by 3.1 percent in the June quarter. Work done is down by 11.1 percent on a year ago. Public sector construction work fell by 0.2 percent in the quarter while private sector activity fell by 6.0 percent.</div>
<div class="column">
<br>Construction work fell in five of the states and territories in the September quarter. Leading the falls was Western Australia (down 13.6 percent), followed by Victoria (down 6.9 percent), South Australia (down 1.3 percent), NSW (down 2.1 percent) and Queensland (down 0.2 percent). Construction rose in the ACT (up 7.1 percent), Tasmania (up 4.7 percent), and the Northern Territory (up 0.6 percent).</div>
<div class="column">
<br>Engineering work fell by 3.8 percent in the September quarter. Engineering construction is down by 23.2 percent on a year ago – just shy of the biggest annual fall on record.</div>
<div class="column">
<br>Commercial (non-residential) building fell by 10.9 per cent in the September quarter to be down 7.6 percent over the year. </div>
<div class="column"> </div>
<div class="column">Residential building fell by 3.1 per cent in the September quarter and was up by 6.3 percent over the year. Alterations &amp; additions fell by 0.6 percent in the quarter while new residential work fell by 3.4 percent.<br><p>The measure of inflation in the construction sector (deflator) was flat in the September quarter. The annual rate of construction inflation fell from 2.6 percent to 2.0 percent. Engineering prices fell by 0.7 percent in the quarter (up 1.7 percent over the year) while building prices rose by 0.6 percent in the quarter (1.9 percent over the year).</p>
<p><a href="/images/2016/11/24/Screen%20Shot%202016-11-24%20at%208.52.56%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/11/24/Screen%20Shot%202016-11-24%20at%208.52.56%20AM.png" alt=""></p>
<p>What is the importance of the economic data?</p>
<p> The Bureau of Statistics releases quarterly estimates of Construction work done. The estimates are based on a survey and cover around 85 per cent of the construction work done in the period. Revised estimates will be released in coming months. The data is useful largely for historical purposes but the work yet to be done estimates provide an early warning signal of future activity. The residential work figures give a good early guide to the strength of residential investment in the national accounts.</p>
<p>What are the implications for interest rates and investors?</p>
There is still plenty of work in the construction sector. But there are winners and losers across states and industry sectors. The Reserve Bank will not be overly concerned with the current trends in construction. Overall activity is correcting as expected and adjusting to the new realities.</div>
<div class="column">
<br>CommSec expects the cash rate to remain on hold over the foreseeable future. </div>
<div class="column"> </div>
<div class="column"><em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></em></div>
</div>
</div>
</div>
</div>
</div>
</div></body></html>

Construction activity falls, tame building costs: Savanth Sebastian

<html><body>
<p>Total dwelling approvals experienced a large decline during September with new dwelling approvals falling 8.7 percent during September and multi-unit developments down 17.5 percent month on month according to the Housing Industry Association.</p>
<p>During September, total new dwelling approvals fell by 8.7 per cent due to big reductions in the larger states, according to Shane Garrett, HIA Senior Economist.</p>
<p>He said during the month, a total of 18,945 approvals were recorded with detached house approvals increasing by 1.7 percent during the month, while multi-unit approvals were down by some 17.5 percent in month-on-month terms.</p>
<p>“Despite the large drop in multi-unit dwelling approvals during September, the volume of approvals in this segment of the market is still at very high levels by historic standards - this means that the immediate pipeline of work will remain very elevated on the apartment side,” he said.</p>
<p>“The concentration of multi-unit dwelling construction in the large states like NSW and Victoria means that these big players bore the brunt of the reduction in multi-unit approvals during September.</p>
<p>“During September, detached house approvals rose to their highest level since May which was good news for both South Australia and Western Australia where detached houses still account for the large majority of new dwellings.</p>
<p>"In September 2016, total seasonally-adjusted new home building approvals increased by 9.4 percent in South Australia and by 5.5 percent in Western Australia.</p>
<p>"During September, building approvals experienced the largest decline in Victoria (-15.6 percent) followed by New South Wales (-13.3 percent).</p>
<p><a href="/images/2016/11/02/Building%20approvals.jpg" target="_blank">Click to enlarge</a></p>
<p> <img src="/images/2016/11/02/Building%20approvals.jpg" alt=""></p>
<p> </p>
</body></html>

Residential building approvals declining during September period

<html><body>
<p>GUEST OBSERVER</p>
<p>The September 2016 building approvals date, released earlier today by the ABS, shows some of the growing fears around the excess heat in the market for new apartments may be premature.</p>
<p>The data shows a massive turnaround in apartment approvals, from the strong growth recorded in the August data of 26.3 percent (year-on-year), to a reversal in the September data, to record a fall over 9.9 percent measured year-on-year.</p>
<p>Building approvals data has a tendency to be quite volatile when comparing results month by month, but this latest result is an example of how quickly the housing market can respond when market conditions change.</p>
<p>Talk of an emerging oversupply in inner-city apartments markets in Sydney, Melbourne and some parts of Brisbane has no doubt made developers and builders in these markets more cautious.</p>
<p>However, Master Builders would caution against being overly bearish on the prospects of inner-city apartment markets while auction clearance rates remain high, rents are growing and house prices continue to march forward.</p>
<p>On the government’s own estimates Sydney is projected to have a population of 6.4 million by 2036. On average, that would add 210,000 people to Sydney’s population each year, or pretty much the equivalent of the entire population of Hobart each and every year for the next twenty years.</p>
<p>Elsewhere, the RBA’s decision this week to keep interest rates on hold came with more jawboning of risks for the housing sector. While the rhetoric was more positive overall, particularly on the global economic outlook, there is a heightened level of concern around the impact a further reduction may have on house prices.</p>
<p>Master Builders agrees with the RBA’s sentiments.  While acknowledging the role interest rates have played in supporting a much needed boom in housing construction over the past couple of years, Master Builder would caution the Bank to carefully consider the impact that further reductions may have on some of Australia’s hotter housing markets in Sydney and Melbourne.</p>
<p><em>Matthew Pollock is national manager, housing, Master Builders Australia and can be contacted <a href="https://www.masterbuilders.com.au" target="_blank">here</a>.</em></p>
</body></html>

Fall in approvals points to peak in housing construction cycle

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">GUEST OBSERVER</div>
<div class="column"> </div>
<div class="column">Dwelling approvals dropped 8.7 percent in Sep, larger than the market expectation of a 3 percent fall but within the range of ‘normal’ volatility for month to month reads.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.09.31%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.09.31%20AM.png" alt=""></div>
<div class="column"> </div>
<div class="column">The detail shows a sharp 16.3 percent drop in units was the main driver in the month – with-in this segment the ‘usual culprit’ when there is volatility - high rise approvals – was down just over 20 percent in the month but down only slightly on a year ago, reflecting the high starting point following a big surge in July. Even with a dip last month, August was the fourth highest reading on record.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.13.02%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.13.02%20AM.png" alt=""></div>
<div class="column"> </div>
<div class="column">Outside of ‘high rise’ the monthly moves were mixed but mostly hint at an underlying trend softening. Private sector house approvals were up 2.3% but ‘mid-rise’ were down over 10 percent. The combined picture from ‘non high rise’ approvals now show a trend decline for six consecutive months tracking at a 10-15 percent annual pace. The state detail shows this coming through across all the main states – a more convincing though still tentative sign of a broad underlying slowdown.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.14.19%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.14.19%20AM.png" alt=""></div>
<div class="column">
<br>The signal from ‘high rise’ remains much less conclusive – despite the latest monthly drop it is unclear whether the segment is levelling out or turning down with approvals uneven across the major states as well (up strongly on a year ago for NSW but lacking a clear direction in Vic and Qld).</div>
<div class="column">
<br>The value of renovation approvals declined 2.2 percent to be down 10.6 percent/yr, pointing to a clear softening heading into year end after strong gains in the first half of 2016.</div>
<div class="column">
<br>The value of non res building approvals spiked sharply in Sep (+119 percent!). The gain came from a mix of retail, office, hotels and entertainment &amp; recreation buildings – the breadth of the gain a promising sign that it may not be just a 'one-off'. State-wise, all of the gain is coming from NSW and Vic.</div>
<div class="column">
<br>Overall, the update provides more tentative evidence of an underlying slowdown in non high rise dwelling approvals but the picture on high rise remains very uncertain. The mix still looks relatively constructive for new dwelling construction in 2017 – when the continued ramp up in apartment work looks set to more than offset the slowdown in other segments. The near term path of high rise approvals is more critical for activity in 2018.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.15.32%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.15.32%20AM.png" alt=""></div>
<div class="column"> </div>
<div class="column">The September pull back in this segments falls well short of a decisive signal – it would take similar-sized moves in the next few months to signal the sort of 'break out' weakening that would indicate a sharp wind down in high rise activity is on the way. </div>
<div class="column"> </div>
<div class="column"><em><span>Matthew Hassan</span> is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></div>
</div>
</div>
</div></body></html>

High rise approvals drop after July surge: Matthew Hassan

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">GUEST OBSERVER</div>
<div class="column"> </div>
<div class="column">New council approvals to build houses or apartments are volatile on a monthly basis.</div>
<div class="column"> </div>
<div class="column">But overall the amount of building is still hovering near record highs. But there was a new ingredient in the mix in September – a sharp lift in commercial building approvals.</div>
<div class="column"> </div>
<div class="column">While not disclosed by the Bureau of Statistics, the project boosting the total seems to be the $2 billion Crown Sydney resort that includes retail, entertainment and hotel accommodation components. While just one – albeit big – project, it still adds to demand for labour and materials and will support building activity through to 2020.</div>
<div class="column">
<br>The sharp price gains for iron ore and thermal and coking coal point to higher incomes in Australia and higher tax revenues for the Federal Government. The higher prices reflect stronger Chinese economic activity, especially a resurgence in residential building. In terms of coal, a reduction in Chinese coal output has served to boost import demand and prices. But overall the news is good for Australian resource regions and good news for the Federal Budget.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/11/02/Screen%20Shot%202016-11-02%20at%201.39.26%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="/images/2016/11/02/Screen%20Shot%202016-11-02%20at%201.39.26%20PM.png" alt=""></div>
<div class="column">
<br>As the Reserve Bank noted yesterday, consumer and business confidence levels are above longer-term averages. Low interest rates, rising real incomes and solid confidence levels should support spending in the lead up to Christmas.</div>
<div class="column">
<br>The National Fiscal Outlook neatly presents in one place the position of Commonwealth and State Government finances. There are no major surprises and nothing to spook rating agencies. Infrastructure spending is up, expenses are down and lower revenues reflect slower nominal economic growth. But to some extent the document may already be ancient history. The economy is picking up pace, higher commodity prices will boost government coffers and inflation looks to be lifting from lows. </div>
<div class="column">
<br>Australian government debt is set to peak near 19 percent of GDP – one of the lowest debt ratios of major advanced economies. And the path to fiscal surplus remains intact.</div>
<div class="column">
<br>What do the figures show?</div>
<div class="column">
<br>Building Approvals:</div>
<div class="column"> </div>
<div class="column">Dwelling approvals fell by 8.7 percent in September – the fourth decline in five months. In trend terms, approvals fell by 0.6 percent.</div>
<div class="column">
<br>Over the past year 237,822 new homes were approved, just shy of the record high 240,919 in the year to October 2015.<br>House approvals rose by 1.7 percent in September – the first rise in four months. Meanwhile ‘lumpy’ apartment approvals fell by 17.5 percent in September after falling by 2.9 percent in August and rising by 24.1 percent in July.</div>
<div class="column">
<br>Dwelling approvals in September were down by 6.4 percent on a year ago in seasonally adjusted terms but up 2.1 percent in trend terms.</div>
<div class="column">
<br>Dwelling approvals across states and territories in September: NSW (-13.3 percent); Victoria (-15.6 percent); Queensland (-11.7 percent); South Australia (+9.4 percent); Western Australia (+5.6 percent); Tasmania (-4.0 percent).</div>
<div class="column"> </div>
<div class="column">In trend terms, approvals fell by 6.0 percent in the Northern Territory but rose by 15.9 percent in the ACT.</div>
<div class="column">
<br>The value of all commercial and residential building approvals soared by 29.9 percent in September to a record high of $11.8 billion. Residential approvals fell by 4.4 percent with new building down by 4.6 percent while alterations &amp; additions fell by 2.2 percent. Commercial building lifted by 118.9 percent in September to a 7-year high of $5.5 billion.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/11/02/Screen%20Shot%202016-11-02%20at%201.40.45%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/11/02/Screen%20Shot%202016-11-02%20at%201.40.45%20PM.png" alt=""></div>
<div class="column">
<br>Fiscal outlook</div>
<div class="column"> </div>
<div class="column">The Parliamentary Budget Office has released the National Fiscal Outlook report. The PBO says Commonwealth net debt will lift to $356.4 billion (18.8 percent of GDP) in 2018/19 compared with $346.6 billion (18.2 percent of GDP) at the 2015/16 mid-year estimate (MYEFO). Net debt is to peak at 19.2 percent of GDP in 2017/18 before improving to reach 17.8 percent of GDP in 2019/20.</div>
<div class="column">
<br>The PBO said: “According to Commonwealth and state government 2016/17 budgets the projected national fiscal deficit from 2015/16 to 2018/19 has deteriorated by $14.9 billion (from a total of $122.3 billion at the time of the mid-year updates to $137.1 billion).</div>
<div class="column">
<br>The deterioration in the projected fiscal outlook from 2015/16 to 2018/19 is due to a downward revision in projected revenue of $18.1 billion along with an upward revision in net capital investment of $2.8 billion, partially offset by a downward revision in expenses of $6.0 billion.</div>
<div class="column">
<br>“Relative to the 2015/16 mid-year fiscal updates, the Commonwealth’s projected fiscal deficit from 2015/16 to 2018/19 has increased by $8.9 billion (from $96.1 billion to $105.1 billion), driven primarily by a decline in projected revenue, partially offset by a reduction in projected expenses and net capital investment.”</div>
<div class="column">
<br>Consumer confidence</div>
<div class="column"> </div>
<div class="column">The ANZ/Roy Morgan consumer confidence rating rose by 0.4 percent to 114.1 in the week to October 30. Confidence is down 1.0 percent over the year but above the average of 112.4 since 2014. Three of five components of the index fell in the latest week:</div>
<div class="column">
<ul>
<li> The estimate of family finances compared with a year ago was down from +9 to +8; </li>
<li> The estimate of family finances over the next year was up from +21 to +26;</li>
<li>  Economic conditions over the next 12 months was down from +0 to -3;</li>
<li>  Economic conditions over the next 5 years was down from +6 to +5;</li>
<li>  The measure of whether it was a good time to buy a major household item was up from +32 points to +35 points.</li>
</ul>
What is the importance of the economic data?</div>
<div class="column">
<br>The Bureau of Statistics' monthly Building Approvals release contains figures on local council approvals to build residential structures such as homes and units as well as commercial premises such as offices and shops. Approval is one of the first stages of the construction ‘pipeline’ and is thus a key leading indicator of future activity. An increase in approvals would point to stronger future activity for construction-related companies.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/11/02/Screen%20Shot%202016-11-02%20at%201.42.09%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="/images/2016/11/02/Screen%20Shot%202016-11-02%20at%201.42.09%20PM.png" alt=""></div>
<div class="column">
<br>The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.</div>
<div class="column">
<br>What are the implications for interest rates and investors?</div>
<div class="column"> </div>
<div class="column">The Reserve Bank has received ample justification for its decision to leave rates on hold. The value of building approvals has hit fresh highs and the lift in iron ore and coal prices will serve to lift labour demand, spending and economic activity in resource regions.</div>
<div class="column">
<br>CommSec expects the Reserve Bank to remain on the interest rate sidelines for an extended period. The job market is in decent shape, consumers and businesses remain confident and home building is just shy of record highs. And importantly, inflation is projected to rise over the next two years.<br><br>
</div>
<div class="column"><em>Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.</em></div>
</div>
</div>
</div></body></html>

Building Approvals

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Building Approvals

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News