Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

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Tuesday, 7 March 2017

Construction boom set to roll over

Building boom looks set to fizzle

After a tremendous run, the volume and value of residential building approvals is now rolling over.

Only 13,545 dwellings were approved for construction in January in original terms.

Of course January always a quiet month for approvals, but this was well down from 15,589 in the prior year as the preceding apartment surge begins to bite.

The chart below plots the dollar value of building approvals by month, for the residential and non-residential sectors. 

The figures are necessarily lumpy, but show the value of residential building looking set to drop.

The picture for non-residential building is also rather mixed. 

There was a huge multi-billion dollar spike in September, in part relating to Packer's Barangaroo development in Sydney, but the uptrend seems unconvincing.

One of the challenges is that so many commercial projects and investment decisions can be pro-cyclical, as I looked at here in respect of Western Australia. 

Around the states, there has been a recent pick-up in non-residential building approvals in Western Australia, relating to an extensive retail expansion, which I looked at in more detail here

Tens of millions of dollars in approvals are set to be been passed for retail expansion in Perth and WA, including at Mandurah Forum, Westfield Whitford City, Karrinyup, Westfield Innaloo, Westfield Garden City, Westfield Carousel, and Westfield Galleria. 

While Sydney and Melbourne have been thriving, other states and territories have had lukewarm economies at best in recent years. 

The figures above suggest that a moderate improvement may be due in South Australia, where a number commercial, industrial, and education projects are set for a green tick.

There has also been a $300 billion expansion approved for SkyCity casino in Adelaide, helping to juice the numbers. 

No matter what the drivers are, Adelaide has long needed a boost, and now the City of Churches appears to be coming to life a little.