Shortage of housing to hit big cities

Original article by Michael Bleby
The Australian Financial Review – Page: 31 & 34 : 13-Feb-20

A new report from Charter Keck Cramer has warned that the recent slowdown in apartment developments means that Sydney, Melbourne and Brisbane will face a housing supply shortage by the end of 2021. Dwelling approvals across Australia fell by 18.5 per cent in calendar 2018, to the lowest level since 2012; all three east coast cities recorded a decline in apartment developments for the year. Rob Burgess of Charter Keck Cramer says the looming housing shortage will put upward pressure on rents.

CORPORATES
CHARTER KECK CRAMER

Housing construction ticks up slightly in June

Original article by Michael Bleby
The Australian Financial Review – Page: 26 : 10-Oct-19

New figures show that residential building starts increased by 1.1 per cent in the June quarter, following declines in the previous two quarters. A 10.6 per cent decline in detached-housing starts was offset by a 21 per cent increase in apartment starts. Meanwhile, housing starts for the year to June totalled 196,867; this was the first year-on-year fall since September 2014. Ernst & Young’s chief economist Joanne Masters expects a further decline in residential construction activity.

CORPORATES
ERNST AND YOUNG, HOUSING INDUSTRY ASSOCIATION LIMITED, COMMONWEALTH SECURITIES LIMITED, TAMAWOOD LIMITED – ASX TWD

Jobs on the line as home builds slide

Original article by Michael Roddan
The Australian – Page: 4 : 31-Jul-19

Data from the Australian Bureau of Statistics shows that new housing approvals fell by 1.2 per cent during June and 26 per cent year-on-year. Apartment approvals were 40 per cent lower in June than at the same time in 2018. Matthew Hassan of Westpac expects further weakness in dwelling approvals over the remainder of 2019 and during the first half of 2020. George Tharenou of UBS warns that the downturn in housing approvals could put about 100,000 construction industry jobs at risk.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, WESTPAC BANKING CORPORATION – ASX WBC, UBS HOLDINGS PTY LTD

Nation’s residential building boom well and truly over: BIS

Original article by Michael Bleby
The Australian Financial Review – Page: 31 : 11-Apr-19

BIS Oxford Economics is bearish about the near-term outlook for Australia’s housing construction market. The firm has forecast that the sector will be hit by a two-year correction, with the number of new dwelling starts tipped to fall to 161,000 a year. This compares with between 220,000 and 230,000 annually over the last four years. Meanwhile, official data shows that there was a 16.3 per cent decline in housing starts during the December quarter, which is the largest quarter-on-quarter fall since September 2000.

CORPORATES
BIS OXFORD ECONOMICS PTY LTD, COMMONWEALTH SECURITIES LIMITED, AUSTRALIA. DEPT OF THE TREASURY, BROOKFIELD MULTIPLEX LIMITED

Apartment approvals hit four-year low

Original article by Michael Bleby
The Australian Financial Review – Page: 4 : 5-Feb-19

Official figures show that just 53,590 units in apartment towers of at least four storeys were approved in 2018, which is about 12 per cent lower than 2017. The number of approvals for stand-alone dwellings fell slightly, to 119,668. Overall, a total of 212,316 apartments, houses and townhouses were approved in 2018, which is the lowest level in four years. JLL has forecast that just 16,000 apartments will be completed across Australia in 2019.

CORPORATES
JONES LANG LASALLE AUSTRALIA PTY LTD, BIS OXFORD ECONOMICS PTY LTD

Stockland, Mirvac and Lendlease face settlement risk

Original article by Ben Wilmot, Samantha Bailey
The Australian – Page: 17 & 23 : 31-Jan-19

UBS says settlement risk could be a problem for Mirvac, Lendlease and Stockland in coming years as a result of the downturn in Australia’s apartment market. US believes that Mirvac is most vulnerable to settlement risk; however, such concerns have been downplayed by the head of Mirvac’s residential division, Stuart Penklis. Meanwhile, Dominic Lambrinos of Chifley Securities says some developers could be forced to sell development sites at a discount.

CORPORATES
UBS HOLDINGS PTY LTD, MIRVAC GROUP – ASX MGR, LEND LEASE GROUP LIMITED – ASX LLC, STOCKLAND – ASX SGP, CHIFLEY SECURITIES, CORELOGIC AUSTRALIA PTY LTD, AMP LIMITED – ASX AMP, CREDIT SUISSE (AUSTRALIA) LIMITED

RBA in housing market warning

Original article by Michael Roddan
The Australian – Page: 1 & 6 : 16-Nov-18

Apartment developers are increasingly having to seek funds from non-bank lenders as the major banks cut back on lending to the sector. The Reserve Bank’s deputy governor Guy Debelle says it is a trend that the central bank is keeping an eye on, warning that if it is overdone it could lead to a downturn in the housing market. Urbis recently reported that only 46 units were sold in new Sydney projects during the September quarter, compared to 381 sales of units in the previous corresponding period.

CORPORATES
RESERVE BANK OF AUSTRALIA, URBIS PTY LTD

Townhouses rise as approvals fall

Original article by Michael Bleby
The Australian Financial Review – Page: 34 : 31-Aug-18

New building approvals fell by 5.2 per cent in seasonally adjusted terms in July when compared to June, according to official figures released on 30 August. Approvals for detached dwellings declined in all mainland states except Queensland, while townhouse approvals increased by 3.9 per cent. Townhouse approvals for the 12 months to July totalled 36,423, compared to 34,256 approvals for the 12 months to August 2016. In comparison, approvals for high-rise apartments have declined from 76,947 in the 12 months to August 2016 to 65,478 in the 12 months to July 2018.

CORPORATES
POLY GROUP CORPORATION, JP MORGAN AUSTRALIA LIMITED, STOCKLAND – ASX SGP

Apartment slowdown a risk to wider industry

Original article by Michael Bleby
The Australian Financial Review – Page: 39 : 8-Aug-18

Australia’s Performance of Construction Index recorded overall growth of 1.4 points to 52.0 in July, marking the sector’s 18th consecutive month of growth. However, the sub-index for attached housing declined by 11.7 points to 36.7, and Peter Burn of the Australian Industry Group says the downturn in activity in the apartment sector could have implications for the broader construction industry if it is sustained.

CORPORATES
THE AUSTRALIAN INDUSTRY GROUP, HOUSING INDUSTRY ASSOCIATION LIMITED

Developers warned about GST trap on unsold units

Original article by Duncan Hughes
The Australian Financial Review – Page: 37 : 15-May-18

Tax adviser Ken Fehily has urged property developers who rent out newly-completed apartments because they are struggling to sell them to be mindful of their goods and services tax liabilities. He says developers in this situation could be triggering GST liabilities without being aware of it, and that they will certainly have to pay the full GST when they eventually sell the apartment. Capital Economics expects Melbourne apartment prices to fall by nine per cent in 2018, while Sydney apartment prices are tipped to decline by four per cent.

CORPORATES
CAPITAL ECONOMICS LIMITED, AUSTRALIAN TAXATION OFFICE, FEHILY ADVISORY