Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 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's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete 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 & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Monday, 8 May 2017

Tower block approvals demolished

What goes up...!

Seasonally adjusted building approvals dropped by 13.4 in March to 16,484, with unit approvals diving by 22.5 per cent. 

Over the last year unit approvals are now down by a substantial 28.4 per cent.

Although the trend series is sneakily shaping upwards, in reality building approvals are now 20 per cent lower than they were a year ago. 

Looking through the monthly noise annual building approvals have fallen from nearly 241,700 at the peak to around 225,400. 

Most of the drop has been accounted for by 'high rise' apartments of four or more storeys, with annual approvals falling from 77,900 at the October 2015 peak to 67,600 in March 2017. 

This isn't too much of a surprise, since high rise development is now by far the highest risk sector in the more densely populated property markets.

Brisbane construction slowdown

Drilling in to the capital city level figures we can see that annual approvals in Greater Perth increased for the first time since December 2014, having dropped by a crunching 39 per cent over that time.

The sharp drop in apartment approvals in March was mainly driven by hefty drops in Sydney - which saw the most subdued number of units approved since early 2016 - and Melbourne, although annual approvals remain elevated in both cities.

In Brisbane annual apartment approvals have dived by 37 per cent in only 13 months as developers chew their way through the record construction pipeline. 

In Darwin unit and apartment approvals have fallen to almost zero over the past 10 months, responding to awful market conditions in the Top End. 

Nationally the monthly drop was very much driven by the high rise sector, with huge drops recorded in each of the most populous states, as developers respond to the challenges now facing Chinese investors. 

The wrap

While annual building approvals remain at historically high levels, total approvals are shaping their way back down towards ~200,000.

As noted yesterday, residential construction accounts for remarkably high share of Australia's labour force, so many of these employees will ultimately need to be rolled into new projects. 

Tomorrow's 2017-18 Federal Budget is expected to announce infrastructure plans, so let's see what Treasurer ScoMo & Co. can come up with in this regard.