Construction Activity

<p>Construction have recently started on WOVA, the latest project from Geocon, Canberra&#39;s largest residential developer.</p>

<p>Following the recent decision to reopen large-scale construction in the ACT, which delayed works that were projected for mid-2021,&nbsp;the $400 million project is Geocon&#39;s main priority following the near completion of it&#39;s Republic precinct of which Nightfall is the latest and final release.</p>

<p>The&nbsp;multi-staged master-planned community will&nbsp;comprises 797 apartments built across four buildings.&nbsp;WOVA will include a signature 24-storey tower on Launceston Street, a 16-storey building behind it fronting Furzer Street, a 12-storey building next to that and a&nbsp;12-storey building on the corner of Launceston Street and Melrose Drive.</p>

<p>[smartcode_project:default project_id=7947 project_image_fid=186442]</p>

<p>Short for <strong>WO</strong>den Re<b>VA</b>mped, the first apartments on offer are for those in the signature tower,&nbsp;home to more than just 271 apartments. It has&nbsp;701 sqm of retail space and five floors of amenity for residents, including a resort-style lap pool, a movie theatre, and resident&rsquo;s lounge, complete with a cocktail bar.</p>

<p>There are also dozens of cafes and eateries surrounding WOVA, beyond its own commercial and residential ground floor featuring eateries, cafes, boutique retail and convenience stores. Residents and visitors can stroll the&nbsp;more than&nbsp;3,000 sqm of landscaped gardens across the precinct.</p>

<p>[smartcode_project:default project_id=7947 project_image_fid=186444]</p>

<p>Designed by the award-winning&nbsp;Fender Katsalidis&nbsp;and Oculus Urban Design, WOVA apartments will feature large terraces and functional living areas. Buyers&nbsp;can choose from three different colour schemes.</p>

<p>The one-bedroom apartments benefit&nbsp;from the ACT government&#39;s recent scrapping of stamp duty for homes under $500,000,&nbsp;with prices starting from as low as $319,900.</p>

<p>Two-bedroom apartments start from $513,900, while three bedroom apartments begin at $1.25 million.</p>

<p>[smartcode_project_cta: project_id=7947]</p>


WOVA is on track to meet it's schedule 2024 opening date following the ACT government's recent decision to re-open large scale construction

jordan_55689

Construction begins on Geocon's Canberra apartment development WOVA 

<p><strong>EXPERT OPINION</strong></p>

<p>Some good news for the property construction industry &ndash; urgent meetings with the most senior officials from Treasury, Infrastructure NSW, the Department of Planning and the Department of Premier and Cabinet have seen the first big steps towards correcting the construction industry closedown travesty.<br />
&nbsp;<br />
Each of the Peak industry representative has been involved and it is clear that the NSW Treasurer is keen to get things back on track. &nbsp;Hearing today that the Premier is also expecting to see the construction industry back into operation on July 31 is great news.<br />
&nbsp;<br />
Urban Taskforce has called for the government to follow some basic steps to avoid the mayhem that followed Saturday&rsquo;s knee-jerk closedown decision (which we now know was not recommended by Health officials):<br />
&nbsp;<br />
&middot; &nbsp; &nbsp; &nbsp; &nbsp; Set a firm plan for re-opening<br />
&middot; &nbsp; &nbsp; &nbsp; &nbsp; Give plenty of notice (this week if possible)<br />
&middot; &nbsp; &nbsp; &nbsp; &nbsp; Consider staged opening as early as next week (the Victorians called this a &ldquo;pilot light operation starting with 25% of the workforce on-site)<br />
&middot; &nbsp; &nbsp; &nbsp; &nbsp; Give health sector, cabinet and community confidence that what is being done is safe<br />
&middot; &nbsp; &nbsp; &nbsp; &nbsp; Ensure effective communication and plans for all sectors of the construction industry including all communities within the workforce<br />
&nbsp;<br />
It is great to see that the government is now preparing an overarching plan to progress towards a full re-opening of the construction industry by 31 July. Industry made clear that we would very much welcome any requirements for the re-opening of sites to be made available to us ASAP and be locked in.</p>

<p>[smartcode_project:default project_id=32227 project_image_fid=93950]<br />
&nbsp;<br />
Urban Taskforce stresses that the construction sector is not a &ldquo;tap&rdquo; which you can turn on and off at a whim.&nbsp;<br />
&nbsp;<br />
An early, staged opening would allow for:<br />
&nbsp;<br />
&middot; &nbsp; &nbsp; &nbsp; &nbsp; Site preparation<br />
&middot; &nbsp; &nbsp; &nbsp; &nbsp; Site safety and security associated with re-start<br />
&middot; &nbsp; &nbsp; &nbsp; &nbsp; Delivery of supplies (logistics firms, plant and equipment and material suppliers would all need to be brought into the loop here)<br />
&middot; &nbsp; &nbsp; &nbsp; &nbsp; Establishment of all new COVID safety measures including signs and site protocols<br />
&middot; &nbsp; &nbsp; &nbsp; &nbsp; On large infrastructure sites, PCR Covid testing for construction workers may be recommended for a once in 7 day test &ndash; pending health advice on the need and the capacity of the health system to cope (given the need for community and priority workforce testing)<br />
&nbsp;<br />
The government is considering the opening all construction industry sectors simultaneously. &nbsp;This is common sense and welcome. A staged set of opening requirements which are &ldquo;fit for purpose&rdquo; are being developed.<br />
&nbsp;<br />
Urban Taskforce remains concerned that some in the government appear to miss-understand the reason for the closedown. &nbsp;It was a clumsy effort to limit the mobility of people around the city &ndash; with zero reference to actual worksites being locations where COVID-19 has been transmitted or passed on.<br />
&nbsp;<br />
Government officials have acknowledged that construction sites are actually NOT a problem in relation to spreading COVID. This is backed up by the Health Exposure Web-site.<br />
&nbsp;<br />
The existing strict COVID-19 safety protocols that have served the construction industry so well to date will be strengthened and additional compliance measures will be applied.</p>

<p>[smartcode_project:default project_id=7317 project_image_fid=79239]<br />
&nbsp;<br />
The NSW government has responded to the community and industry backlash and is now listening to all the right people. &nbsp; We will continue to work with government to develop a balanced proposal for the re-opening of the industry. These measures will then be considered by Cabinet, in context and without panic.</p>

<p>Tom Forrest is CEO of the Urban Taskforce Australia is a property development industry group, representing Australia&rsquo;s most prominent property developers and equity financiers</p>


jonathan_55692

Urban Taskforce welcomes moves to re-open construction industry

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<p>A boom in mixed-use or other sector projects has seen Melbourne record a lift of almost eight per cent in the Q1 2021, according to the latest RLB Crane Index.</p>

<p>Over the last six months there have been 15 cranes added, with four added to each of the $800 million Caulfield Village in Caulfield North and the $220 million Richmond Quarter.</p>

<p>Three cranes were added to the Elizabeth north project in Elizabeth Street, bringing their total number of cranes to four.</p>

<p><img alt="" height="779" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/rlb_crane_melbourne.jpg" width="1200"><br>
Melbourne's Crane Index. Source: RLB Crane Index Q1</p>

<p>West Side Place Stage two also has four cranes, while there are three cranes are located at QVM Residences, Sapphire by the Gardens and Union Quarter. These six projects account for 22 of the 39 mixed-use cranes in Melbourne, according to RLB.</p>

<p>The cranes came down at the now completed Docklands Residences in Docklands. Developed by Capital Alliance, Docklands Residences comprises 88 apartments which have been built above a 200 room Marriott Hotel, the first built in Australia for over two decades.</p>

<p>[smartcode_project:default project_id=3205]</p>

<p>Cranes in inner Melbourne fell by seven to 95, the lowest since Q2 2018. That was primarily caused by the completion or near completion of many residential projects which saw residential cranes fall by 16 to 28.</p>

<p>Melbourne's east saw their residential cranes drop to nine, the lowest on record. Residential projects still account for 50 per cent of total cranes in east.</p>

<p>Residential cranes were removed from Camberwell's Anderson Park, the Summit and Alpine Apartments in Doncaster and the Hawthorn East apartment development Hawthorn Park.</p>

<p>[smartcode_project:default project_id=3730]</p>

<p>Developer Dahua Group had Rothelowman create the $300 million Hawthorn Park development alongside landscape architect Jack Merlo, with the standout feature of the 368 apartment development its striking infinity pool linking two of buildings.</p>

<p>Cranes came down at the nearby Toorak Road, Hawthorn East development Brasshouse, Lilydale Grove in Hawthorn East and The Kent in Hawthorn. The East Central tower in Box Hill saw cranes removed, as did Ramsay Gardens in Vermont South.</p>

<p>New cranes were placed for Pace of Blackburn, the modern project from the recent Master Builders Victoria award winners Pace Development Group, as well as Grocon's Denmark Kew and Prospect and Panorama Apartments in Box Hill, among others.</p>

<p>Melbourne's north saw 22 new cranes added with the region hitting 27, just below the record high of 27 in Q2 2018. There were just six removals.</p>

<p>It was busy in Brunswick, with cranes being moved on to the sites of Pellicano's build-to-rent Solarino house, Lucent's The Stewart Collective and Balfe Park Lane Apartments.</p>

<p>[smartcode_project:default project_id=4513]</p>

<p>Home by Caydon in Alphington and the Capella Apartments in Reservoir, developed by Forte Group, each installed two cranes on their sites.</p>

<p>[smartcode_project:default project_id=24441]</p>

<p>Melbourne's north was the only region to see an increase in residential cranes, increasing by 16 cranes to 23.</p>

<p>The south saw an increase of four cranes mainly due to commencement of the Caulfield Village project.</p>

<p>Other new projects in the south include Pavillion on the Park, developed by Sydney One Investments in Armadale, Lowe Living's Azure in Aspendale and Olea Residences in Caulfield.</p>

<p>There's also the family Supportive housing in Dandenong, Prince Corporation's East village in Prahran, Sandringham's Trentham House to be delivered by Carpe and the Loreto old St Georges building in Toorak.</p>

<p>Cranes were removed from Sutherland and Alara in Armadale, Olivia and Brighton Collection in Brighton, Collins &amp; Bates in Chadstone, Eastwood Monash in Clayton and The Glen in Glen Waverley, among others.</p>

<p>[smartcode_project:default project_id=3950]</p>

<p>Melbourne's west grew by four cranes to now total 18 cranes. Footscray remains the central area of crane activity with eight cranes including three new cranes at the new mixed-use project at Union Quarter in Spotswood.</p>

<p>Cranes were also added to Liberty one, 21 Victoria and Riverfront in Footscray and Kings Village in Kingsville.</p>

<p>[smartcode_project:default project_id=709]</p>

<p>Liberty One, to be delivered by Bensons Property Group, has 350 one and two bedroom apartments across its Warde Street development.</p>
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Cranes in inner Melbourne fell by seven to 95, the lowest since Q2 2018

Joel Robinson

Mixed-use projects see crane levels rise across Melbourne

<html><body><p>The latest dwelling approval data reveals a big gap opening up between house and apartment construction.

IFM economist Alex Joiner advised there had been a "big pullback in building approvals."

Approvals for apartments and townhouses dropped by 22 per cent year on year, the lowest level approved since January 2012, in seasonally adjusted terms.

The approvals were down 39 percent month on month with $5bn of new residential builds committed in the month.

ABS construction statistician Daniel Rossi anticipates the HomeBuilder scheme would continue to support the residential construction sector for the next few months.

“The surge in HomeBuilder applications at the end of 2020, as well as the extension of the program to March, will continue to provide support for private house approvals in the coming months,” Mr Rossi said.

https://twitter.com/IFM_Economist/status/1366548452486705152

But the relative weakness in higher-density approvals compared with the detached segment reflects the headwinds of the pandemic, "particularly very weak migration flows," James Foster, the global macro analyst noted.

Foster suggested the migration restraints were "weighing on developer forecasts for demand."

Approvals need to rebound sharply to match forecast required commencements, UBS economist George Tharenou told The Australian Financial Review, however TD economist Stephen Koukoulas suggested the pullback "may go someway to alleviate the looming oversupply issue."

By contrast to high density approvals, approvals for private houses fell 12 per cent in January to 12,100, following their HomeBuilder-induced all-time December high, to be 38 per cent higher than in January 2020.

Approvals for houses also fell across all states in January.

The HomeBuilder stimulus measures had mostly been directed towards the detached segment of the market, Foster noted.   

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January dwelling approvals fell from their HomeBuilder high in December, but are still sit at elevated levels.

jchancellor

Big gap emerging between house and apartment construction

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<p>With construction commencing June, a $960,000 off the plan sale townhouse has been achieved in the four lot Ocean Grove complex, Iluka.</p>

<p>It has been designed with a relaxed ‘kick-your-shoes-off’ luxury in mind, with attention to detail and to light, outdoor integration and its finishes. </p>

<p>The single level contemporary space at 4/96 The Avenue will have two bedrooms, two bathrooms along with a private courtyard, plus a single lock-up garage with internal entry.</p>

<p>It is a collaborative build by MILA Development Group, Avery Constructions, Beers Interiors &amp; Design, Archsign and COS Design Landscaping.</p>

<p>Its finishes will include Hampton Grey timber floors along with soft toned 100% undyed 3 ply pure NZ Wool loop pile carpets. </p>

<p>The sale, at the upper end of its price guidance, was secured by Ben Roberts and Zoe Le Page at Bellarine Property who have listed just two of the four townhouse spaces.</p>

<p>Prices include a three bedroom, two bathroom two car garaging offering at 3/96 The Avenue with $1,295,000 hopes.</p>

<p>The 800 sqm holding with four bedroom 1950s house cost $975,000 in 2019.</p>
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A $960,000 off the plan sale townhouse has been achieved in the four lot Ocean Grove complex, Iluka

Sale secured with construction soon to commence on Ocean Grove complex, Iluka

<p>The number of loans for the construction of a new home saw record-breaking levels in November 2020, as the figure, tracked by the ABS, record its sixth consecutive rise.</p>

<p>New home loan commitments in November jumped a further 7.2&nbsp;per cent higher than the record-breaking levels in October 2020 to now be 99&nbsp;per cent higher over the year.</p>

<p>HIA&nbsp;economist&nbsp;Angela Lillicrap says HIA&#39;s new home sales data suggests the detached housing finance approvals will continue to be strong over the coming months.</p>

<p>&ldquo;It is evident in today&rsquo;s data that HomeBuilder has been successful in boosting confidence in the market and creating work on the ground,&rdquo; Ms Lillicrap says, adding that the extension of&nbsp;HomeBuilder will see the strength in housing finance data extend into 2021,&quot; Lillicrap says.</p>

<p>The value of construction loan commitments grew 5.6 per cent in November, rising 75 per cent since July. This follows the June implementation of the Government&rsquo;s HomeBuilder grant in response to COVID-19.&nbsp;</p>

<p>Loans for first home buyers also soared in November, with 13,905 loan commitments from first home buyers&nbsp;the highest since 2009. The number of loans accounted for&nbsp;42 per cent of the total number of owner occupier loans issued in November.</p>

<p><img alt="" height="866" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/record_home_lending_commsec.jpg" width="1200" /></p>

<p>CommSec economist Ryan Felsman says housing activity across Australia is buoyant, supported by record low mortgage rates and government policy initiatives.</p>

<p>&quot;Home prices are lifting, new home sales have hit decade highs and increasing numbers of young Aussies are committing to home ownership,&quot; Felsman says.</p>

<p>New housing loan approvals hit record highs in November with the easing of lockdown restrictions in Victoria (up 19.6 per cent) further driving up home loan demand.</p>

<h2>Am I eligible&nbsp;for HomeBuilder?</h2>

<p>Time is running out for prospective HomeBuilder applicants to to advantage of the&nbsp;$15,000 grant to construct a new home, with the government stimulus set to conclude on March 31. Applications however will now be taken until April 14 2021.</p>

<p>To be eligible for HomeBuilder, below are the criteria:</p>

<p>-&nbsp;Construction must commence within six months of the contract being signed.</p>

<p>- The property value cannot exceed $950,000 in NSW, $850,000 in Victoria or $750,000 in all other States and Territories.</p>

<p>-&nbsp;Applications must be submitted to the relevant State Revenue Office by April 14 2021.</p>

<h2>What can I buy?</h2>

<p>Urban has taken a look at some projects across the country which qualify for HomeBuilder grants.</p>

<p><a href="https://www.urban.com.au/new-townhouses/haven-278-288-blackshaws-road-altona-north">Haven, Altona Heights</a></p>

<p>Prices: From $605,000</p>

<p><a href="https://www.urban.com.au/new-townhouses/haven-278-288-blackshaws-road-altona-north"><img alt="" height="778" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/haven_altona.jpg" width="1200" /></a></p>

<p>The Stockland developed Haven in Altona North offers a collection of boutique townhouses, designed by the award-winning SJB Architects. They have two, three and four bedroom townhouses, with prices starting from $605,000 for the two bed, two bath townhouses with a parking spot.</p>

<p>The three bedroom townhouses, spanning nearly 200 sqm, start from $742,000 and the four bedroom townhouses start from $805,000, with 216 sqm of space.</p>

<p><a href="https://www.urban.com.au/new-townhouses/luma-247-st-albans-road-sunshine-north">Luma, Sunshine North</a></p>

<p>Prices: From $545,000</p>

<p><a href="https://www.urban.com.au/new-townhouses/luma-247-st-albans-road-sunshine-north"><img alt="" height="607" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/luma_st_albans.jpg" width="1200" /></a></p>

<p>Development Victoria have secured a prime site in Sunshine North, with a vision to create a brand new collection of 300 townhomes, comprising of two, three and four bedroom configurations.</p>

<p>Prices start from $545,000 for the two bedroom townhouses set in a master-planned community by RobertsDay, with plans for a new 3,600 sqm park.</p>

<p><a href="https://www.urban.com.au/new-townhouses/sixth-avenue-15-sixth-avenue-chelsea-heights">Sixth Avenue, Chelsea Heights</a></p>

<p>Prices: From $599,000</p>

<p><a href="https://www.urban.com.au/new-townhouses/sixth-avenue-15-sixth-avenue-chelsea-heights"><img alt="" height="912" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/sixth_avenue_chelsea_heights.jpg" width="1200" /></a></p>

<p>Point Architects have designed the townhomes in the bayside Chelsea Heights, the development of the Aultun Group. They&#39;ve created 59 townhomes with prices starting at $599,000 for the two bedroom townhouses set over two stories. The three bedders start from $650,000 and the four bedroom townhouses from $820,000.</p>

<p>Sixth Ave. Chelsea Heights has already achieved&nbsp;a &lsquo;Best Practice&rsquo; rating for BESS (Built Environment Sustainability Scorecard) with many key sustainable design strategies including a 5 star gas hot water system, water efficient tapware and showerheads as well as bicycle parking provided within each home and recycled water for garden irrigation and toilet flushing. &nbsp;<br />
&nbsp;</p>

<p>&nbsp;</p>


New home loan commitments in November jumped a further 7.2 per cent higher than the record-breaking levels in October 2020.



HomeBuilder impact sees new home loan approvals continue to break record levels

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<p><span>I recently spent a bit of time charting the death throes of the resources construction boom. </span></p>
<p><span>As you can see below, although the Northern Territory has been offered a temporary reprieve by the massive $34 billion Ichthys LNG project, engineering construction activity has been hit extremely hard almost everywhere else, particularly so in Western Australia (down by 24 per cent over the past year), Queensland (-38 per cent) and South Australia (-25 per cent).</span><span style="line-height: 1.3em; font-weight: bold;"> </span></p>
<div id="post-body-6634680014865062538" class="post-body entry-content">
<div><a href="/images/2015/08/20/eng2.jpg" target="_blank"><span><span>Click to enlarge</span></span></a></div>
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<div><span><span><img src="/images/2015/08/20/eng2.jpg" alt=""></span></span></div>
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<div> </div>
<div>
<span>Moreover, despite a year-on-year decline of </span>more than 20 per cent<span> the downturn has miles to run yet before construction activity even gets close to its historical norm. The value of work commenced points to an accelerating decline.</span>
</div>
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<div><a href="/images/2015/08/20/eng3.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div> </div>
<div> </div>
<div><span>Moreover, with the Commodity Price Index having continued to weaken, we could easily overshoot to the downside, which terms-of-trade booms in Australia have historically tended to do.</span></div>
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<div><a href="/images/2015/08/20/Commods1.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div>
<div>Given that the construction stage tends to be comfortably the most labour-intensive phase of resources projects, this must inevitably result in sharply declining demand around many regional areas of Australia.<br><br><strong><span style="text-decoration: underline;">Vacancies rising in resources capitals</span></strong><br><br>On a related note <em>SQM Research</em> released its latest July 2015 Vacancy Rates and asking rents data yesterday.</div>
<div> </div>
<div>Vacancy rates nationally held steady at <strong>2.4 per cent</strong> but the figures revealed a significant divergence between the resources capital cities and the rest.</div>
<div> </div>
<div>As you can see in the chart below, moving from left to right vacancy rates remain relatively tight in Hobart (1.2 per cent), Sydney (1.8 per cent) and Adelaide (1.9 per cent).<br><br>Hobart's vacancy rates have tightened over the past year from 1.5 per cent to 1.2 per cent despite a near total dearth of population growth - if you think carefully about it, you may come to your own conclusions as to why - while Sydney's vacancy rate of 1.8 per cent is unchanged from one year ago.<br><br>Brisbane city-wide vacancy rate is now recorded as being 2.6 per cent, and in fact in a number of apartment construction hubs vacancy rates are already considerably higher than that. </div>
<div> </div>
<div>Shifting across towards the right hand edge of the chart Darwin is now tracking at an elevated 3.5 per cent having spiralled from just 1.4 per cent a year ago.<br><br>Meanwhile vacancy rates in Perth have blown all the way out from 2.5 per cent in July 2014 to 3.8 per cent.</div>
<div> </div>
<div><a href="/images/2015/08/20/SQM.jpg" target="_blank">Click to enlarge</a></div>
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<div><span> </span></div>
<div><span><img src="/images/2015/08/20/SQM.jpg" alt=""></span></div>
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<div>
<strong><span style="text-decoration: underline;">Asking rents follow vacancies</span></strong><br><br><span>Also reported in the </span><em>SQM</em> media release<span> was a massive 20.5 per cent fall in asking rents for houses in Darwin, as well as 15.2 per cent decline in asking rents for Darwin units.</span><br><br><span>Over the past year asking rents have also declined in Perth for both houses (-7.4 per cent) and units (-6.3 per cent), according to </span><em>SQM</em><span>'s index.</span><br><br><span>Of course, vacancy rates are expected to rise at this stage in the construction cycle, but it may take Perth and Darwin quite some time to absorb the excess stock.</span>
</div>
<div><span> </span></div>
<div><a href="/images/2015/08/20/AW1.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div><span><img src="/images/2015/08/20/AW1.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<strong><span style="text-decoration: underline;">Mining towns crushed</span></strong><br><br><span>This capital city market action is of course small fry compared to what is playing out in resources regions.</span><br><br><span>Following on in sympathy from an epic property crash in the Pilbara, the </span><em>Australian Financial Review</em><span> </span>reported<span> that investors in the Bowen Basin heartland are being sent broke with dwelling prices continuing to collapse dramatically.</span><br><br><span>Property prices in Moranbah have reportedly crashed by up to 70 per cent over the past three years, while prices in Dysart prices have crashed by closer to 50 per cent over the same period.</span><br><br><span>Instead of linking back to articles which promised untold riches from investing in mining towns, it is worth considering the two golden rules which nearly all of the most successful investors follow religiously:</span><br><br><strong>Rule 1 - Don't lose money.</strong><br><strong><br></strong><strong>Rule 2 - See Rule 1.</strong><br><br><span>When it comes to property investment, there is no easy way back from a 50 per cent drawdown, particularly if leverage is used.</span><br><br><span>Remember that the promise of higher returns often comes with correspondingly higher risks. </span>
</div>
<div><span> </span></div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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pwargent-M4siyDbqQY

SQM foreshadows mining downturn: Pete Wargent

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<p>EXPERT OBSERVER</p>
<p>Brisbane's once-rampant apartment construction has now righted itself, and indeed median unit prices were up a fraction over the past year in the Queensland capital. </p>
<div id="post-body-1517642067810614857" class="post-body entry-content">
<div>Victoria's apartment construction on the other hand has exploded to a record high (as expected from leading indicators), with the value of work done an astronomical 416 per cent higher than a decade earlier in chain volume measures terms. </div>
<div> </div>
<div>Sydney doesn't build so many houses, so a lot of activity is expected, but for Melbourne this is a boom-and-a-half!</div>
<div> </div>
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<br>It's an everything boom for Victorian construction with public and engineering works also going on a tear. </div>
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<div>Queensland engineering construction is also finally on the rise again after the state's multi-year downturn. </div>
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<br><div>Adding in detached housing construction, Victoria's construction super-boom over 16 consecutive quarters and counting helped to increase total work done nationally in the second quarter by 1.6 per cent in seasonally adjusted terms. </div>
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<div>Eight consecutive quarterly increases in South Australia have also helped to offset the resources and housing construction weakness in Western Australia.<br><br>Construction work in New South Wales is set to top out now as apartment starts decline. </div>
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<br><div><strong>Job ads stalling</strong></div>
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<div>In other news skilled job vacancies were up by 4.7 per cent from a year earlier to be 30.5 per cent above the October 2013 nadir in July 2018, according to the latest Department of Employment figures. </div>
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<div>The seasonally adjusted monthly result was up just a notch following three consecutive declines. </div>
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<div>Unsurprisingly Victoria scored well here too, with falling unemployment looking like a shoo-in for Melbourne. </div>
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<br><div>In Western Australia vacancies were up 16.3 per cent over the past year, pointing to brighter days ahead across the Nullarbor.<br><br>Nationally, though, the growth in job ads seems to have stalled, with an election to follow - and that rarely inspires confidence in employers.</div>
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<div><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></div>
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Victoria's everything boom: Pete Wargent

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<p>EXPERT OBSERVER</p>
<p>Fewer homes will be built over the coming year, and that is to be expected following the frenetic pace of building over 2014-2018.</p>
<p>But there will be no shortage of work for the broader building and construction sectors.</p>
<p>Over $140 billion of work is yet to be done.</p>
<p>Commercial building work to be completed is at record highs with engineering work near 4-year highs. And that doesn’t include the raft of new infrastructure planned by state and territory governments.</p>
<p>Rebuilding after the horrific bushfires will add to the work total as well in coming years.</p>
<p>While off the absolute peak levels in 2012 – a total driven by mining activity – work yet to be done on building and construction projects is up almost 4 per cent over the year and near the highest levels in 4½ years.</p>
<p>There is a perception that the economy is listing. But building and construction remains a bevy of activity and there is plenty of work to support building material providers, builders, tradespeople and professional services like architects. Outside the resources sector, a record amount of engineering work remains to be done.</p>
<p><strong>What do the figures show?</strong></p>
<p>The number of dwelling starts fell by 11.7 per cent in the September quarter after rising 1.5 per cent in the June quarter.</p>
<p>House starts fell by 4.8 per cent in the September quarter after a 9.4 per cent fall in the June quarter. Apartment starts fell by 21.9 per cent in the September quarter after a 20.3 per cent increase in the June quarter.</p>
<p>Work started on 180,972 new dwellings over the 12 months to September, down by 21.5 per cent on the year. Starts fell from the record high of 234,186 dwellings in the year to December 2016.</p>
<p>Across Australia, starts in the September quarter fell in six states/territories: NSW (down by 19.5 per cent); Victoria (down by 9.7 per cent); Queensland (up by 3.0 per cent); South Australia (up by 1.9 per cent); Western Australia (down by 14.8 per cent); Tasmania (down by 4.6 per cent); Northern Territory (down by 18.5 per cent); and the ACT (down by 3.1 per cent).</p>
<p>In the year to September, dwelling starts were higher than the decade average in only two of the states and territories: NSW (up 7.6 per cent) and Tasmania (up 17.0 per cent). Starts were below the decade average in: Victoria (down 0.2 per cent); Queensland (down 13.6 per cent); South Australia (down by 9.1 per cent); Western Australia (down by 35.4 per cent); Northern Territory (down 60.9 per cent); the ACT (down 7.6 per cent); and total Australia (down 5.9 per cent).</p>
<p>In the September quarter residential and commercial building work done fell by 0.5 per cent. New residential work fell 3.4 per cent with alterations &amp; additions down 0.3 per cent but commercial building rose by 3.8 per cent and engineering work rose by 0.5 per cent.</p>
<p>The value of residential and commercial building work in the pipeline stood at $89.6 billion at the end of September, down by 7.1 per cent on a year ago and below the record-high of $99.2 billion at the end of June 2018.</p>
<p>Across Australia, 201,317 homes are currently being built, down from a record 231,416 homes in March 2018.</p>
<p>In the September quarter residential and commercial building work yet to be done (completed), stood at $69.8 billion, down 7.9 per cent on a year ago. Engineering work to be done stood at $74.1 billion, up 18.1 per cent on a year ago. Total building and construction work to be done stood at $144 billion at the end of September, just off 4½-year highs but up 3.9 per cent on the year.</p>
<p><strong>What are the implications for interest rates and investors?</strong></p>
<p>Building and construction sectors face mixed prospects. Work to be done on commercial projects stands at record highs. Engineering work is near 5-year highs but dwelling construction is easing from unsustainable highs.</p>
<p>When the word ‘decline’ or ‘fall’ is used, the perception is negative. But always the base needs to be considered as well as history. While some construction work levels have eased, in many sectors the decline is from super-normal or unsustainable levels. In NSW at the peak more than 70,000 apartments were being built. Prior to the last five years, a number of 25,000 apartments being built was considered a high level of building.</p>
<p>The healthy levels of construction work to be done provides further complications for the Reserve Bank in its thinking about rates at the February 2020 Board meeting. The next two key events are the December job figures on January 23 and the Consumer Price Index (inflation) on January 29.</p>
<p><strong>CRAIG JAMES </strong><em>is the Chief Economist at CommSec</em></p>
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Record commercial building work to be done: CommSec's Craig James

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<p>Australia-wide residential construction activity fell in FY 2019 but is expected to recover through to 2022, according to a recent report released by WT Partnership Australia.</p>
<p>The report found that the current decline is more of a ‘trough’ and is expected to last the next two years, then stabilise through the end of a relatively ‘mild cycle’ over the seven years to 2026; activity is then expected to rise through to 2030.</p>
<p>Whilst the residential slow down comes off the back of all-time highs in the eastern states, demand for new housing will still be driven by continuing high population growth in Sydney, Melbourne and Southern QLD, despite cuts to immigration.</p>
<p>Construction and engineering will be driven by $100 billion of infrastructure investment announced by the Federal Government. This will be focused on “shovel ready” projects with relatively short completion windows. </p>
<p><strong>Challenges for the year</strong></p>
<p>1. The cladding issues has had a major impact on the selling and buying of apartments</p>
<p>2. There is more red tape and further policy measures that will decrease immigration leading to lower growth in demand for dwellings</p>
<p>3. The recent interest rate cuts have seen housing prices slightly strengthen</p>
<p>4. Building approvals for new apartments has dramatically dropped</p>
<p>5. Federal Government has flagged a ten-year $100 billion investment in transport infrastructure across Australia. While this is positive, it is absolutely vital that these infrastructure projects do not blow due to the growing population needing more transport options.</p>
<p>6. Biggest focus in terms of value is in bridges, railways and harbours, followed by electricity and pipelines</p>
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