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.

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"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'.

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Monday, 3 April 2017

Brisbane apartment approvals take a swan dive

Approvals bounce

A stronger than expected result for building approvals, with the seasonally adjusted result up by 8.3 per cent in the month of February to 18,995, driven by a 10.9 per cent increase in attached dwellings.

Despite this, approvals were still 4.9 per cent lower than a year ago, and the trend seems more likely to continue declining over time. 

Annual approvals declined a bit further to ~229,000, with annual attached dwelling approvals now down from ~123,000 at their heady peak to ~113,000. 

The composition of this boom shows how it has very much been driven by 'high rise' apartments, to an extent not previously seen in Australian cities. 

Despite the stronger monthly result, the figures do appear to be consistent with housing starts declining over the next few years.

Brisbane and Perth drop

Annual house approvals in Perth are now 39 per cent below their peak of December 2014 as prices have come off. 

Elsewhere approvals are also looking somewhat toppy in this sector. 

The strong monthly result was largely driven by a high number of attached approvals in Sydney (3,287) and Melbourne (2,558).

Fears of oversupply in Melbourne, however, have been countered by record population growth

Brisbane on the other hand is unsurprisingly seeing apartment approvals sink like a stone, with the figures for recent months suggesting that annual approvals will drop by at least another 50 per cent from here. 

Overall, it seems likely that multi-storey apartment blocks will find a 'new normal' that is higher than in the past. But for now, Queensland has yet to find that new normal. 

The wrap

Overall, a solid result, but admidst the recent hysteria - with every man, his dog, RBA, APRA, ASIC, and loads of others all calling for 'something to be done' - including everything from outlawing investor loans to the banning of real estate agents - the downturn in building approvals will doubtless be resumed forthwith. 

Somewhat self-defeating, of course, and with the inflation rate already consistently missing target on the downside since 2015 will only ensure that the next move in interest rates is down.