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Sunday, 25 March 2018

Normal service to be resumed forthwith

Building bonanza

I've written a lot here about Queensland's record apartment construction boom, which is now rebalancing.

See here and here, for example. 

The number of attached dwellings constructed through this cycle will exceed even the post-recession boom of the early 1990s. 

The number of detached house starts is now rising steadily, but for attached dwellings new commencements are falling fast, especially for the higher-density projects.

And the official numbers are 6 to 9 months old. 

A quick drive around central Brisbane reveals that many projects have been stalled or mothballed, and staged releases pushed out. 

Developers simply can't shift many of them, with unusually 'flexible' terms being offered to prospective buyers in some cases. 

Below annual dwelling starts for the state are mapped against the estimated change in the resident population. 

I deliberately haven't messed around with the axes on the chart as some are inclined to do.

After all, this cycle has been characterised by record volumes of high-rise apartments, which might reasonably be expected house fewer persons per unit on average previously.

There is also arguably the issue of Chinese investors and apartments deliberately left vacant to account for, although the Census didn't appear to find Brisbane to have an abnormally high percentage of  uninhabited dwellings. 

The numbers show total dwelling starts falling fast in 2017, as they needed to. 

Queensland's net overseas immigration and therefore population growth pulled back hard after the peak of resources construction, leading to a dwelling stock overhang, in a similar vein to Western Australia. 

Fortunately for local developers, Queensland has become the state with the greatest internal population flows in the country, which is helping to stabilise the ship.

Many apartment developers will be looking to offload their final units quick-sharp and put the shutters up for the remainder of this cycle. 

As ever, significant variations become apparent when drilling down to the regional and suburb level.