The latest building activity figures confirmed that the record number of apartments under construction in Sydney is now morphing into a surge in completions.
June is always a seasonally soft month for rental markets, but the latest release from SQM Research recorded a vacancy rate jumping all the way to 2.8 per cent for Sydney.
That's well up from 2 per cent a year earlier.
Vacancies were very high in the Hills District at 4.9 per cent.
But the inner suburbs have by no means been immune as apartments complete across the city.
There's a certain seasonal aspect to this.
Indeed, Australia's capitals are becoming more seasonal than ever with net overseas migration peaking in the warmer months, and hundreds of thousands of international students coming and going in recent years - but there's also high level of new supply for the city to deal with. Around the traps
Melbourne's vacancy rate was just 1.6 per cent in the month of June 2018.
However, Melbourne now has more dwellings under construction than at any time in its history, as well as a range of transport, infrastructure, and commercial projects.
Nationally, the vacancy rate declined from a year earlier from 2.5 per cent to 2.3 per cent, representing a decline from 78,314 to 75,757 vacancies.
There were year-on-year declines in Perth, Adelaide, Canberra, and even Brisbane as more interstate migrants head north (as yet not fully recorded in official guesstimates, which have more lag than my Grandad's boiler).
You can find SQM's more detailed commentary in its always-excellent media release here.
The Real Estate Institute of New South Wales also released its vacancy rates figures, which told a similar story.
The Sydney-wide vacancy rate was 2.7 per cent, with year-on-year increases across the harbour city.
The Hunter Valley (ex-Newcastle) continued its multi-year tightening cycle with a vacancy rate of just 1.5 per cent.
A quick shout-out to SQM Research and its excellent range of data series!
As the Royal Commission approaches its interim report, fewer vendors are listing their homes and investment properties for sale in Sydney.
The number of new listings for this time of year is now tracking at the lowest level since 2013.
However, those properties already on the market are taking longer to sell. And so total number of listings is at the highest level in Sydney since 2012 (while acknowledging that the population of Greater Sydney has swelled by about ½ million since that time, depending upon where you draw the boundaries).
It's bittersweet to read these statistics as a property buyer.
In the suburbs where we normally buy houses such as Bondi Junction I take a sideways glance at the online listings to find that there are - wait for it - a grand total of three houses to choose from (including a tiny 2-bedroom cottage, and a house on the modern day car park that is Bondi Road).
Family-appropriate houses: one.
If you look with a magnifying glass, you might just be able to make out an increase in the number of eastern suburbs houses listed for sale.
Source: SQM Research
How then, are total Sydney listings at the highest level since 2012?
Well, the answer lies in the fringe areas of Western Sydney and South Western Sydney where stock is taking time to shift.
Of course, most new houses are built on the fringe and therefore a total increase in stock listings is not entirely unexpected, but it's clear from auction clearance rates that the inner west, northern beaches, and lower north shore (about 80 per cent this weekend) are faring much better than some of these secondary locations.
Godspeed to these vendors!
'Gliding smoothly to a soft landing'?
According to CoreLogic, Sydney's longest and greatest peak-to-trough decline in dwelling prices across four decades of figures was 11.6 per cent through an ultimately recessionary 28-month period spanning from 1988 to 1991.
Extremely high mortgage rates followed by a recession proved to be a tough combination for the Sydney housing market to deal with at that time.
Over the past 12 months the median dwelling price in Sydney has declined by 4.9 per cent, on a shallower trajectory than 3 of the past 7 downturns, though of course individual experiences will differ.
The traditional spring selling season approaches in the coming months.
While there's been much talk of 'cuts' to the annual rate of immigration, the number of people heading to Australia appears to be as strong as ever, with record high temporary and bridging visas helping to, erm, bridge the gap.
Annual permanent and long term arrivals hit a record 803,030 over the year to May 2018, which is considerably higher than the 708,910 of only three years earlier.
There was, furthermore, a record number of seasonally adjusted short-term resident returns in May.
Asian tourism and education boom
Meanwhile, short-term arrivals hit a record seasonally adjusted high of 728,600 in the month of May 2018.
Over the year short-term arrivals now exceed 9 million, also a record.
Sydney retains its position as by far the biggest drawcard for overseas visitors.
Most short-term visitors intend to stay in New South Wales (3.42 million), Victoria (2.27 million), and Queensland (1.95 million).
The ABS notes that caution should be applied to the place of intended stay for the months of April and May, with an unusually high number opting for Canberra (shome mishtake, shurely!), so any blips relating to the past month or two should be interpreted accordingly.
The tourism boom has been quite spectacular, but the growth in this sector does look to be slowing.
Education arrivals, on the other hand, have gone from strength to strength, with more than 575,000 over the year to May 2018 (there may be some double-counting here, but generally speaking this has mirrored the rise in enrolment trends of recent years).
Finally, the massive increase in short-term arrivals of recent years has largely and self-evidently been a China phenomenon, although a number of other countries across Asia and America have contributed.
Summarily, while here may be some tweaks to permanent migration numbers at the margin, the overall demand for Australia Inc. remains about as high as it's ever been.
The main beneficiaries will likely be those cities with sought-after educational institutions, and regions with appeal to Asian tourists (or both).
Don't normally deal in hyberbole on this blog, but gee whizz this header isn't too far off the truth.
When the latest engineering construction figures were released last month they showed a huge ramp up in work yet to be done in Victoria, as a volley of transport and infrastructure projects underway saw the engineering pipeline explode nearly $10 billion higher, to sit at by far the highest ever figure.
In a recent report on the end of the construction boom, I also noted that of the capital cities only Melbourne presently has the dynamics to sustain an elevated rate of apartment construction, supported by extraordinary population growth.
An unprecedented surge in attached dwelling approvals October and November 2017 had become commencements by the first quarter of 2018, as the number of dwellings under construction continued to rise statewide.
Commercial building work in the pipeline is booming, too, doubling in only the past couple of years to more than $8 billion.
The net result is a wild and synchronised upswing in the total pipeline, with the best part of $38 billion of work yet to be done, also a near-doubling in only the past couple of years.
Nationally construction activity may be set to fall, but clearly this won't happen any time soon in Victoria.
In fact, looking at this chart Melbourne may even experience the opposite problem, being a constraint on capacity!
Residential construction in particular is known to have a strong multiplier effect, so it's quite possible that Melbourne will see its unemployment rate fall in a similar manner to Sydney.