Melbourne.jpg

Welcome to The Urban Developer's housing market pulse check for the city of Melbourne...

Housing Market Insights Brisbane January 2023.jpg

The Urban Developer’s latest Brisbane housing market insights reveal that the city’s property prices have continued to deflate, as the Reserve Bank’s persistant rate-rising campaign to fight inflation puts pressure on residential property values across the nation. This resource, updated periodically, will collate and examine the economic levers pushing and pulling Brisbane’s housing market.

Sydney.jpg

The Urban Developer’s housing market insights combines market research, rolling indices, and expert opinion to unpack Sydney’s real estate market...

Untitled-1.jpg

The Urban Developer’s latest Gold Coast housing market insights reveals that conditions on the Gold Coast are cooling, with values now falling faster than almost anywhere else in Queensland...

 The Reserve Bank of Australia  “is prepared to be patient” keeping interest rates at an all time low as the housing market value rises to $9 trillion according to the Australian Bureau of Statistics.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The Reserve Bank of Australia  “is prepared to be patient”, keeping interest rates at an all-time low as the housing market value rises faster than ever, hitting $9 trillion in record time.</p><p></p><p>The value of Australia’s residential homes increased by $1 trillion in the past six months, It took 15 months for the previous trillion to be reached, in March 2021, according to the latest Australian Bureau of Statistics results. </p><p></p><p>NSW homes accounted for 40 per cent of the total with median prices increasing to a record $1.1 million.</p><p></p><p>Residential property prices rose 5 per cent in the September quarter, house prices were up 5.7 per cent, and attached home prices rose 3.1 per cent.</p><p></p><p>The ABS results were revealed just as the Reserve Bank of Australia announced it would maintain the cash rate target, as expected. </p><p></p><p><strong>Total value of residential stock in Australia</strong></p><p></p><p></p><p></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/1771c564-bd32-4a6b-a6c4-2f623de2d5f5.jpeg" width="804"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^Source: ABS, September 2021 results</sub></sup></p><p>ABS head of prices statistics Michelle Marquardt said that for the past 12 months all capital cities had set records or reached growth rates not seen in many years.</p><p></p><p>“The September quarter results were consistent with housing market conditions,” Marquardt said. </p><p></p><p>“Continued solid growth in residential property prices was supported by record low interest rates, strong demand and low levels of stock on the market.”</p><p></p><p>RBA governor Philip Lowe said they were prepared to be patient and wait until it was suitable to increase the rate.</p><p></p><p>“The board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range,” Lowe said.</p><p></p><p>“This will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently.”</p><p></p><p><strong>Residential property prices rise</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>Location</th><th>June to Sept Quarter 2021</th><th>Annual change to Sept</th></tr></thead><tbody><tr><th>Weighted average</th><th>5.0%</th><th>21.7%</th></tr><tr><th>Sydney</th><th>6.2%</th><th>25.4%</th></tr><tr><th>Melbourne</th><th>3.6%</th><th>19.5%</th></tr><tr><th>Brisbane</th><th>6.1%</th><th>19.7%</th></tr><tr><th>Adelaide</th><th>5.9%</th><th>19.0%</th></tr><tr><th>Perth</th><th>2.0%</th><th>15.7%</th></tr><tr><th>Hobart</th><th>8.2%</th><th>25.7%</th></tr><tr><th>Darwin</th><th>1.6%</th><th>13.7%</th></tr><tr><th>Canberra</th><th>6.0%</th><th>25.2%</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^Source: ABS, September 2021 results</sub></sup></p><p>House price increases have started to slow across capital cities and the total <a href="https://www.theurbandeveloper.com/articles/investors-rush-to-buy-australian-homes">value of housing loan commitments has reduced </a>despite a new-found appetite for property from investors.</p><p></p><p>“Housing credit increased by 6.7 per cent over the past year, but, more recently, the value of housing loan commitments has declined from high levels,” Lowe said.</p><p></p><p>“With interest rates at historically low levels, it is important that lending standards are maintained and that borrowers have adequate buffers.”</p><p></p><p>However, a change in interest rates is not likely to affect residential prices with <a href="https://www.theurbandeveloper.com/articles/house-prices-rise-through-interest-rate-hikes">values increasing despite multiple cash rate rises </a>in the past 25 years.</p><p></p><p>Instead, affordability was expected to be the major constraint on prices with the <a href="https://www.theurbandeveloper.com/articles/brisbane-catches-up-to-sydney-melbourne-property-prices">Brisbane market absorbing a considerable population escaping Sydney and Melbourne prices</a>.</p></div></div></div></div></div>

 The Reserve Bank of Australia  “is prepared to be patient” keeping interest rates at an all time low as the housing market value rises to $9 trillion

Houses Shrinking but Apartments Getting Bigger

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Apartments are getting bigger, reflecting the Covid-driven desire for extra living space, but simultaneously the size of new houses being built across Australia is shrinking.</p><p>Nevertheless, compared to most other countries, Australians are still living large.</p><p>Overall, however, new homes—both detached houses and apartments—were on average slightly smaller nationally, according to the Commsec Annual Home Size Report.</p><p>Queensland was the only state to buck the trend, building bigger houses and apartments throughout 2020-21.</p><p>The size of the average new home in Queensland increased by 5.5 per cent over the period to an eight-year high of 205.8sq m.</p><p>Commsec chief economist Craig James told <em>The Urban Developer </em>that although the pandemic may have influenced home size, it was relatively early days in the construction cycle to clearly determine why Queensland was building bigger detached houses and apartments.</p><p>“But what we have seen in the past couple of years is continued strength in terms of the Gold Coast and the Sunshine Coast as destinations for people to live in and that may be an influence,” he said.</p><p>By comparison, new home sizes fell in New South Wales (-1 per cent), Victoria (-3.4 per cent), South Australia (-3 per cent), Western Australia (-1.6 per cent), Tasmania (-2.9 per cent) and ACT (-0.4 per cent). Northern Territory—where apartment sizes fell—recorded an increase in home sizes (3.8 per cent) off the back of bigger houses (5 per cent) being built.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/51ab321b-b230-4845-9898-da91e34ae38c.jpg" width="1600"/></picture><div><span style="align-content:center;opacity:0.8">▲ The experience of Covid has caused more families to look for bigger homes, particularly apartments.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>The Commsec report—based on commissioned Australia Bureau of Statistics data on the average floor space of new homes built in Australia— indicated the average new apartment completed in 2020-21 was at an 11-year high of 138.3sq m, up 0.4 per cent over the year.</p><p>Meanwhile, the average free-standing house completed in the same period was 229.3sq m, down 2.9 per cent from seven-year highs.</p><p>Across the board, however, the size of the average new home built over 2020-21 was 195.8sq m, down 0.4 per cent from the six-year high set in 2019-20.</p><p>“There have been shifting trends in the sizes and styles of homes over the past decade and Covid-19 has been throwing another element into the mix,” James said.</p><p>“The big question is whether Aussies continue to embrace working from home, opting to move away from apartments in, or near the CBD, in preference for a larger home in a regional or suburban ‘lifestyle’ area.</p><p>“Or it may be just a case that bigger apartments will be sought—either close to capital cities or in the suburbs.”</p><p>In 2017-18, the average size of an apartment hit record lows but prior to Covid a higher proportion of Australians were choosing to live in apartments rather than detached houses.</p><p>“The experience with Covid-19 has certainly caused more families to look for bigger homes and caused others to add extra rooms to existing homes.,” James said.</p><p>“More Aussies want to achieve a situation where family members are able to live, work and relax at home. No doubt, builders and architects have been quick to respond to the new demands by families.”</p><p>According to the data, the biggest houses in Australia are being built in the ACT (259.3sq m), ahead of Victoria (238.8sq m); and Queensland (231.5sq m). Victoria is building the biggest apartment and townhouses (156.8sq m) followed by SA (149sq m)and the NT (141.5sq m).</p><p>Tasmania has both the smallest houses (176.5sq m) and apartments (91sq m).</p><p>The report also confirmed that Australia is living large compared to other countries and along with the US continues to build the biggest homes in the world. But the average size of new homes completed in both countries had fallen over the past year.</p><p>In the US, the average new home completed was 192sq m, about 2 per cent smaller than the average Australian home.</p></div></div></div></div></div>

Apartments are getting bigger reflecting the Covid-driven desire for extra living space but simultaneously the size of new houses are shrinking...

7bf99559-cad3-4f38-b2cf-ed8248221c99

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Unit rent prices have risen for the first time in 18 months, recording a 2.5 per cent growth in line with house rent increases. </p><p>Domain’s Rent Report showed that gross house rental yields were now at a record low of 3.56 per cent across the capital cities, while unit rental yields increased 1.1 per cent to 3.95 per cent.</p><p>Investors are moving into the unit market as asking rents for houses hit record highs in Sydney, Brisbane, Adelaide and Canberra.</p><p>Unit asking rent prices have hit record highs in Brisbane and Canberra, and maintained record levels in Adelaide. </p><p>It is the first time on record that Melbourne has had the lowest house rent of all capital cities. It is the only city in Australia to have house rents lower than before the pandemic. </p><p>Domain chief economist Dr Nicola Powell said renters in Sydney, Melbourne and Brisbane were starting to shift into cheaper apartment living, which was consistent with rent price rises.</p><p>“[This is] largely being driven by affordability, whether that’s people seeking a better deal or cities that have record high house rents become a strain on budgets,” Powell said.</p><p>“However, space is an important factor for tenants who may have a family or need to share a house. </p><p>“In some cities, it’s clear that tenants are willing to pay a premium for space necessary for their lifestyle, as house rents achieve highs and rise at a faster pace for rentals with more bedrooms.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Houses vs units: quarterly rent changes</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/e6a05448-e78b-4862-a90b-88949bbe927e.png" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^Source: Domain Quarterly Rent Report</sub></sup></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Interstate and regional migration has impacted Melbourne’s asking rents for houses, which are the lowest of all capital cities, according to Powell.</p><p>“Melburnians have grappled with the longest lockdown of any city in the world, and this has contributed to the market&#x27;s weak rental growth,” Powell said.</p><p>“It is a good sign for tenants who are wanting more space and now is the time to negotiate on asking rents to secure a good deal. </p><p>“However, we have seen that vacancy rates have continued to decline, suggesting that the empty pool of rentals will continue to shrink and rents will not stay this low for much longer.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Houses vs units: quarterly rent price changes</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>City</th><th>House rent</th><th>Quarterly change</th><th>Unit rent</th><th>Quarterly change</th></tr></thead><tbody><tr><th>Sydney</th><th>$580</th><th>▲$30</th><th>$485</th><th>▲$15</th></tr><tr><th>Melbourne</th><th>$430</th><th>-</th><th>$370</th><th>▲$5</th></tr><tr><th>Brisbane</th><th>$460</th><th>▲$10</th><th>$410</th><th>▲$10</th></tr><tr><th>Adelaide</th><th>$440</th><th>▲$10</th><th>$350</th><th>-</th></tr><tr><th>Perth</th><th>$450</th><th>-</th><th>$380</th><th>-</th></tr><tr><th>Canberra</th><th>$645</th><th>▲$15</th><th>$520</th><th>▲$20</th></tr><tr><th>Darwin</th><th>$620</th><th>▲$27</th><th>$470</th><th>▲$20</th></tr><tr><th>Hobart</th><th>$495</th><th>-</th><th>$400</th><th>-</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^Source: Domain Quarterly Rent Report</sub></sup></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Capital cities that have escaped harsh lockdowns such as Perth and Hobart have maintained rent asking prices over the quarter. </p><p>This is a positive sign for tenants indicating that after a year of rapid growth, asking rents will start to slow.</p><p>Australian Bureau of Statistics data showed investors had taken up a further 5 per cent of the share of home loan values as first home buyer demand contracted. </p><p>“There’s tailwind behind rising investment activity boosting rental supply, tighter lending could stall this, particularly if we see further moves from the regulators,” Powell said.</p><p>“Some Aussies who made a tree change will start returning to the city as well as people immigrating from other countries will cause vacancy rates to decrease in inner cities driving up rent prices.”</p></div></div></div></div></div>

Unit rent prices have risen for the first time in 18 months recording a 2.5 per cent growth and delivering higher yields than houses...

Public transport and affordability are key for a third of property buyers with new hotspots for first time buyers emerging… 

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>First home buyers looking for a first rung on the property ladder are honing in on locations near public transport with affordability in mind. </p><p>In most parts of the country the most popular location was clear, however in NSW and Victoria buyers were scrambling to get in wherever they could, according to broker platform Hashching.</p><p>Their analysis found buyers were looking for the “sweet spot” of good commuting options to capital cities, affordable housing, and nearby recreational areas, which was reflected in the high number of transactions from independent mortgage brokers.</p><p><strong>Top locations for first home buyers</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>State</th><th>Postcode</th><th>Percentage of FHB</th></tr></thead><tbody><tr><th>Qld</th><th>Toowoomba</th><th>20%</th></tr><tr><th>NSW</th><th>Pemulwuy</th><th>2%</th></tr><tr><th>Vic</th><th>Deven Meadows, Roxburgh Park</th><th>2% each</th></tr><tr><th>ACT</th><th>Dunlop</th><th>11%</th></tr><tr><th>SA</th><th>Port Lincoln</th><th>8%</th></tr><tr><th>WA</th><th>Bunbury</th><th>6%</th></tr><tr><th>Tasmania</th><th>Lenah Valley</th><th>12%</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sub><sup>^Source: Hashching</sup></sub></p><p>Hasching chief executive Arun Maharaj said that in NSW and Victoria the market had failed to create appealing centres of entry-level property, pushing the cohort to other states. </p><p>“This results in buyers choosing to save more and compete with buyers higher up the ladder rather than relocate, or to choose to purchase their first home elsewhere,” Maharaj said.</p><p>“From the data, it looks like Hobart is the prime beneficiary of this trend, which saw high first home buyer activity in centralised locations, with Adelaide’s southern postcodes also seeing significant activity, which suggests first home buyers are finding refuge there from other states.”</p><p>The Australian Bureau of Statistics shows a third of people looking at the residential property market were first home buyers.</p><p>Since the end of HomeBuilder the number of new loan commitments for this group dropped -6.8 per cent in July following a -7.8 per cent drop the previous month. </p><p>The drop in new loan commitments was felt across the broader owner-occupier market, which fell -6.1 per cent for newly erected homes and -4.7 to build new homes.</p></div></div></div></div></div>

First home buyers are looking for a rung on the property ladder and are honing in locations near public transport with affordability in mind. 

House Prices Up $50,000 in Quarter

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Runaway property prices have continued to surge at a breakneck pace, lifting by 6.7 per cent, or $50,000, in the June quarter.</p><p>According to the Australian Bureau of Statistics, property prices are now up 16.8 per cent year-on-year after being supercharged by ultra-low interest rates, government stimulus, forced household savings and elevated demand for bigger homes.</p><p>Australian Bureau of Statistics head of prices statistics Michelle Marquardt said prices had also been bolstered by low levels of stock on the market being met with strong demand and properties transacting at an increasingly rapid rate.</p><p>“With the exception of Hobart and Darwin, capital cities continued to see house price rises outpace those of attached dwellings such as apartments and units,” Marquardt said.</p><p>“Price growth for both property types is being driven by the upper segments of the market.”</p><p>Sydney median property prices grew faster than the national average again, up 8.1 per cent, or $81,000 in value, to now be 19.3 per cent higher than for the same period last year.</p><p>Property prices in Canberra lifted by 8.2 per cent across the quarter, followed by Melbourne, up 6.1 per cent; Brisbane, 5.7 per cent; and Hobart, 6.3 per cent. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Residential property prices</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>City</th><th>Mar 21 to Jun 21 % change</th><th>June Qtr 20 to Jun Qtr 21 % change</th></tr></thead><tbody><tr><th>Combined</th><th>6.7%▲</th><th>16.8%▲</th></tr><tr><th>Sydney</th><th>8.1%▲</th><th>19.3%▲</th></tr><tr><th>Melbourne</th><th>6.1%▲</th><th>15%▲</th></tr><tr><th>Brisbane</th><th>5.7%▲</th><th>14.6%▲</th></tr><tr><th>Adelaide</th><th>5.3%▲</th><th>14.2%▲</th></tr><tr><th>Perth</th><th>4.8%▲</th><th>15%▲</th></tr><tr><th>Hobart</th><th>6.3%▲</th><th>17.7%▲</th></tr><tr><th>Darwin</th><th>4.6%▼</th><th>12.8%▲</th></tr><tr><th>Canberra</th><th>8.2%▲</th><th>19.1%▲</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^Source: Australian Bureau of Statistics</sub></sup></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Corelogic figures last week showed nationwide housing values continued to rise, up 1.5 per cent in August, but down from the record 2.8 per cent national gain in March.</p><p>CommSec chief economist Craig James said the total value of Australia’s 10.68 million dwellings was now $8924.6 billion after growing by $596.4 billion in the June quarter.</p><p>“Australia has almost 10.7 million homes [and] quite sensationally the average value of those homes has lifted to an average dwelling price of $835,700 in just three months,” James said.</p><p>“For those paying off their homes or who own them outright, that represents an amazing lift in wealth levels, thus underpinning increased spending on discretionary purchases.”</p><p>Commonwealth Bank estimated that the average number of people per home decreased from 2.42 people to 2.41 people in the recent quarter while the number of homes grew by 79,900 during the past two quarters despite Australia’s population growing by just 42,200.</p><p>The bank’s economists expect national dwelling prices to rise by 8 per cent across 2021 and 6 per cent in 2022, and a result “tilted towards stronger outcomes” was more likely.</p><p>The bank said that even if the Reserve Bank started taking its foot off some low interest rates, such as the benchmark three-year bond, that would still not dampen the booming prices.</p><p>The Reserve Bank’s cash rate, which steers the interest rate on mortgages offered by retail banks, remains at a record low interest rates of 0.1 per cent for what it predicts to be as long as four years.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/88c0e839-e938-41f1-bbee-e78e71b68a97.jpg" width="1600"/></picture><div><span style="align-content:center;opacity:0.8">▲ The national average deposit needed to secure a mortgage is now $100,000—an increase of 16 per cent since January, 2019.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>RBA governor Phillip Lowe used a speech on Tuesday to push back against suggestions that rate hikes and tougher lending standards could be used to quell house prices.</p><p>“While it is true that higher interest rates would ... see lower housing prices, they would also mean fewer jobs and lower wages growth,” Lowe said.</p><p>“This is a poor trade-off in the current circumstances.</p><p>“It is also relevant that broader measures of household wealth have increased recently. </p><p>“Housing prices are 19 per cent higher than they were before the pandemic and Australian equity prices are around 10 per cent higher. </p><p>“This lift in the net wealth of the household sector is one of the things that suggest that once the restrictions are eased, households will be well placed to start spending again.“</p><p>Household savings are also expected to hit at least $200 billion this year as lockdowns keep Australia’s two largest cities shuttered.</p><p>In the June quarter, the household savings ratio—the percentage of unspent disposal income—fell below 10 per cent for the first time in more than a year to be half of where it was the same time a year earlier.</p><p>While many households paid down debt in the early days of the pandemic, but $93 billion in largely housing-related debt has since been added.</p><p>“More broadly, society-wide concerns about the level of housing prices are not best addressed through increasing interest rates and curbs on lending,” Lowe said.</p><p>“While monetary policy is contributing to higher housing prices at the moment, the way to address these concerns is through the structural factors that influence the value of the land upon which our dwellings are built.”</p></div></div></div></div></div>

Runaway property prices have continued to surge at breakneck pace, lifting by 6.7 per cent, or $50,000, in the June quarter...

The impact of labour constraints and material supplies is starting to weigh on construction work, particularly for residential projects according to the Australian Bureau of Statistics data. 

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The value of residential construction is being weighed down by constraints in labour and material supplies, latest figures from the ABS show.</p><p>The Australian Bureau of Statistics said the value dropped 0.1 per cent, or $18.9 million, for June.</p><p>These results are likely to get worse with lockdowns to impact July results, when construction activity <a href="https://www.theurbandeveloper.com/articles/lockdowns-interrupt-construction-boom">slowed</a> for the first time in 10 months, according to the Australian PCI.</p><p>Delivery disruptions, material <a href="https://www.theurbandeveloper.com/articles/construction-industry-steel-supply-shortage">shortages</a> and <a href="https://www.theurbandeveloper.com/articles/construction-material-prices-labor-shortages-supply-chain">price rises</a> were felt on sites across the country.</p><p>However, publicly funded work was boosting construction in other sectors with infrastructure projects in the eastern states as well as health, education and transportation facilities pushing the total value to $52.88 billion. </p><p><strong>Value of construction work done</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>Type</th><th>Value</th><th>Monthly Change</th><th>Annual Change</th></tr></thead><tbody><tr><th>Building</th><th>$30.56bn</th><th>0.1</th><th>2.8</th></tr><tr><th>Residential</th><th>$19.47bn</th><th>-0.1</th><th>8.9</th></tr><tr><th>Non-residential</th><th>$11.52bn</th><th>0.3</th><th>-6.0</th></tr><tr><th>Engineering</th><th>$22.31bn</th><th>1.8</th><th>-2.7</th></tr><tr><th>Total</th><th>$52.88bn</th><th>0.8</th><th>0.4</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^Source: Australian Bureau of Statistics, June 2021</sub></sup></p><p>BIS Oxford Economics principal economist Nicholas Fearnley said significant project delays and cost overruns could be expected.</p><p>“The fall in activity over the June quarter points to supply chain issues weighing heavily on the sector,” Fearnley said. </p><p>“With both labour and material capacity constraints in play, significant project delays and cost overruns can be expected, especially given the elevated pipeline of work flowing from the now concluded HomeBuilder incentive. </p><p>“The considerable backlog of work that has developed should sustain an elevated level of activity for home builders through 2022 and into 2023.”</p><p>Across the country, the Northern Territory and Tasmania had the biggest boost in total value of construction with work done up 31 per cent and 22.3 per cent respectfully. </p><p>These areas were followed by South Australia up 15.3 per cent and Western Australia at 6.5 per cent. </p><p>New South Wales just held onto positive territory at 0.9 per cent however the lockdowns did not start until the end of June.</p><p>The value of construction was down in Victoria -5.9 per cent and Queensland -1.8 per cent.</p></div></div></div></div></div>

The impact of labour constraints and material supplies is starting to weigh on construction work: Australian Bureau of Statistics

Scentre Group CEO wants Covid vaccines to be administered in shopping centres as recurrent lockdowns impact the retail sector.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Scentre Group chief executive Peter Allen wants vaccines to be administered in shopping centres as reoccurring lockdowns drag down the retail sector.</p><p>Allen, who is also the chair of the Shopping Centre Council of Australia, reiterated the council&#x27;s standing offer to support the vaccine rollout it made earlier this year.</p><p>Retail trade suffered in Victoria during the lockdown in May, according to the Australian Bureau of Statistics, and shutdowns in other states are expected to impact next month’s data.</p><p>So far more than 8.7 million vaccine doses have been administered, with 30 per cent of adults receiving their first dose.</p><p>However, this was a fair way from the yet-to-be determined thresholds required to move the country out of regular lockdowns for phase B of a four-phase national Covid-19 response.</p><p>Allen said they were willing to assist the government with the vaccination rollout across the country.</p><p>“Shopping centres provide safe and convenient locations for the community, with approximately nine out of 10 people living within a 20km radius of an SCCA-owned shopping centre, and more than 70 per cent of the population within 5kms,” Allen said.</p><p>“As retail is Australia’s largest private sector employer, shopping centres are also substantial employment hubs and could provide a safe vaccination location for retail and other workers at each centre.”</p><p>Despite the effects of lockdown on the sector, the outlook for Australian retail real estate investment trusts was stabilising, according to S&amp;P Global. </p><p>The revised outlook rated the majority of REITS as stable “reflecting their ability to weather the Covid-19 pandemic and maintain a buffer to absorb further disruptions” according to the report.</p><p>However, disruptions to trade were likely to continue, with the long-term easing of restrictions only available in phase B of the national pandemic response, and lockdown elimination outlined in phase C.</p><p>The National Cabinet’s task force was conducting scientific modelling to identify the trigger points for stage B, which at this point is expected to exceed 60 per cent of adults being fully vaccinated.</p></div></div></div></div></div>

Scentre Group chief executive Peter Allen wants vaccines to be administered in shopping centres as reoccurring lockdowns impact the retail sector...

The pace of housing market boom is slipping as new home approvals drop and building material prices continue to rise according to ABS and Australian PCI results.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The pace of housing market boom is slipping as new home approvals drop and building material prices continue to rise.</p><p>The Australian Bureau of Statistics data indicated dwelling approvals dropped 7.1 per cent in May, following a 5.7 per cent decline in April.</p><p>Despite this, approvals were up 55 per cent on last year with 144,827 new houses approved, the most in a one year period since records began in 1983.</p><p>While the results remained elevated, construction activity was decelerating according to the Ai Group’s performance of construction index.</p><p><strong>Dwelling approvals: May</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>Seasonally adjusted</th><th>May 2021</th><th>Monthly Change</th><th>Yearly Change</th></tr></thead><tbody><tr><th>Total dwellings approved</th><th>20,163</th><th>-7.1%</th><th>52.7%</th></tr><tr><th>Private sector houses</th><th>13,571</th><th>-10.3%</th><th>55.2%</th></tr><tr><th>Private sector dwellings excluding houses</th><th>6,374</th><th>1.2</th><th>53.6%</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^Source: Australian Bureau of Statistics<br></sub></sup></p><p>The construction index showed there were skills shortages as well as supply disruptions and bottlenecks in building materials with those prices hitting all-time highs in June.</p><p>These growing workloads combined with building material supply and price uncertainty were having a <a href="https://www.theurbandeveloper.com/articles/construction-industry-a-360bn-house-of-cards">negative impact </a>on building companies.</p><p>Across the country, the number of dwelling approvals fell in Queensland by -13.1 per cent, in South Australia -11.9 per cent, New South Wales by -10.9 per cent and Western Australia  by -8.7 per cent. </p><p>Victoria and Tasmania were the only places to have an increase by 3.2 and 2.0 per cent respectively.</p><p><strong>Approvals by building type</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/44f195dc-0f29-4286-9a89-14f5441cf784.jpeg" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^Source: Australian Bureau of Statistics</sub></sup><br></p><p>Ai Group head of policy, Peter Burn said while there is strong growth in the industry the pace of expansion was slipping as it faced capacity constraints and rising input prices.</p><p>“New orders were at very healthy levels indicating further expansion in the months ahead,” Burn said. </p><p>“However, lag times are extending with capacity already stretched.”</p><p>BIS Oxford Economics senior economist Maree Kilroy said the end of HomeBuilder was also contributing to the results. </p><p>“The impact of stimulus measures concluding will continue to wash through dwelling approval figures over the 2022 financial year,” Kilroy said. </p><p>“The easing of the HomeBuilder commencement requirement from six to eighteen months will smooth out the fall.”</p></div></div></div></div></div>

The high price of construction is continuing to disrupt the housing market with the number of new home approvals falling a further 7.1 per cent...

AUSTRALIAN BUREAU OF STATISTICS