A Growing Settlement Risk Across The Melbourne And Sydney Unit Markets

From Tim Lawless twitter handle


Putting the housing construction boom into perspective. Really a unit construction boom. At end of Q2'18 there were 156,633 units under construction in Aus, three quarters are in two states: NSW (66,511) & Vic (50,085), many sold off plan when market conditions were much stronger




more detail at
The Latest Dwellings Under Construction Data Highlights A Growing Settlement Risk Across The Melbourne And Sydney Unit Markets

 

Quick quiz: are there more residential construction cranes along the east coast of Australia, or across New York, Boston, Chicago, San Francisco, Los Angeles, Toronto and Calgary combined?


If you answered New York et al, you may be shocked (as we were) to learn that when it comes to crane counts, we put these major US and Canadian cities in the shade. Today, there are 528 cranes scattered across Sydney, Melbourne and Brisbane, eclipsing the 419 cranes in the North American cities.

Courtesy of UBS and the RLB Crane Index, data released shows that the residential crane count in Australia skyrocketed by 313 per cent between September 2013 and September 2016. Although new installations have decelerated over 2016, it would appear that the multi-year apartment construction boom is still alive and well.

Cheers,

 

Looks like the chinese developers really did a number on us will we get investors jumping from abandoned high rises soon?

 

.. Nice helmet btw

 

Quite a few settlements due within next two years right along with 240bn IO2PI expiry, couple this with falling valuations and crediting tightening..... and it has a real potential of getting ugly.

 

Unsurprising. RBA warned of this in 2015

“The risk of a downturn in apartment markets is greatest in the inner-city regions of Melbourne and Brisbane, which look susceptible to potential oversupply,” the bank notes.​

"Price growth is already slowing for inner city apartments in Melbourne and Brisbane, and there are signs that activity in the Sydney property market is beginning to slow after two years of breakneck activity. Supply and demand in all three regions appears to be nearing equilibrium, with significant more supply scheduled to come. It’s clear that downside risks to prices are building."​

The RBA's warning on Australia's apartment boom

 

Credit tightening doesn't need to get worse, the full impact of current tightening is not fully backed in the cake yet, and then on top of it we have this 120bn rollover by each yr till 2021 increasing forced sales along with OTP settlements forced sales, all adding more and more supply when demand is rapidly shrinking from investor side and now even slowing from OO side, suddenly it has become a multi front pressure for those who want-to or have-to sell within next 2/3 years.

 

Thanks , not the first time someone has complimented me on the helmet. #MeToo

 

In Melbourne not just apartments, masses of urban fringe lots also at risk. The use of nominee contracts encouraged flipping. Who's holding the bag: AusHousingCrasⒽ on Twitter