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Sydney Construction Boom Nearly Here; Construction growth of 15% is forecast in NSW over next two years
Topic Started: 8 Aug 2011, 12:56 PM (51,156 Views)
Shadow
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Evil Mouzealot Specufestor

frankrider
2 May 2013, 03:19 PM
The denial shads expresses so obviously on this thread is just a normal part of the process of getting fleeced! How does he hide from this truth? He rants about gold collapsing still, even as it is going up, week after week? And his beloved houses (that he bought at a 40 year asset bubble top) are back to 2002 levels in real terms.
Frankrider... there's another angry bear who vanished as soon as the gold bubble collapse resumed.

Interesting how he makes the same error as Goldbug regarding house prices being back to 2002 levels in real terms...
Edited by Shadow, 17 Sep 2013, 04:42 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Inner Sydney apartment construction rush over next five years

By Alistair Walsh
Thursday, 19 September 2013

There are 25,000 apartments across 130 projects to be completed in the next five in Sydney, according to a report consultancy firm Deep End Services.

The CBD will be home to 4,000 of those apartments, the greatest of all 36 suburbs covered by the report.

About 40% of those apartments are currently being built. Nearly 3000 will be completed this year and 6000 will be finished next year.

The 2014 peak comes with the completion of stages in some of the bigger projects presently underway in Inner Sydney, such as Central Park in Chippendale, Harold Park in Forest Lodge, Divercity in Waterloo, VSQ, Emerald Park, Eon, EastVillage and Platinum all in Zetland and The Quay Haymarket.

The 25,000 apartments identified would reportedly house 44,000 additional people – about in line with population forecasts by NSW Government.

The inner city suburbs are garnering the most building approvals for units.

“Although pockets of apartment development are also emerging in the middle-ring suburbs of Macquarie Park, Parramatta and Olympic Park, demand is greatest in the Inner Sydney Region, close to the largest concentration of jobs, public transport, universities, retail and entertainment,” the report says.

“Strategic planning policies for metropolitan Sydney call for significant population growth to be accommodated within the existing urban area.

“The present apartment cycle means both market preference and planning strategies are aligned and this appears to be giving rare speed and volume to the process and number of approvals and development.”

Read more: http://www.propertyobserver.com.au/new-south-wales/inner-sydney-apartment-construction-rush-over-next-five-years/2013091965145
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Construction boom??? WTF???

We have enough homes here in Oz to fill the NEED of housing. What we do not have is so many homes as to stamp down the PRICE SPECULATION – and this is the part that I agree with in regards to the “supply and demand” argument. But in my opinion, in order to stamp down the inordinate demand we’ve seen in Oz since circa 2000 we’d need a MASSIVE OVERSUPPLY of housing.

So for me, the more pertinent question is “what’s driving and supporting the speculation?”. IMHO, this is what is causing house prices to outstrip their functional values FAR more than our inability to dump housing on-market fast enough to drop prices. In short, “speculation” is not necessarily equal to “demand”.

This other issue I have with the laser-focus is say we embark on a freewheeling open development approach… I believe we’d have to have a massive oversupply in order to stamp down the demand that is being supported by cheap money and bad federal policy. And thus would swing the pendulum too far in the opposite direction.

This too would be folly as we’d have too many homes (as many cities in the US now have) that simply sit and rot as there are not enough people to fill them. This has massive environmental impacts as well as long term down trend potential for home prices below their functional values.

“We can fill those with immigrants!” you say? Likely true… you do have me there. But it that the best idea? NOTE: I’m a dirty-dirty sepo-Australian myself ;)

It seems like opening development restrictions (while a damn fine idea in moderation) is simply another can of worms that would cause it’s own entirely predictable set of problems!
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Sydney apartment boom will be biggest ever

PUBLISHED: 09 Nov 2013
Rebecca Thistleton

Sydney’s skyline, especially the inner city, is set for a redesign as the city’s biggest apartment boom arrives.

This peak will put more cranes in the sky than past peaks. Listed developers, private groups and cashed-up offshore developers are primed to deliver new off-the-plan apartment stock.

The boom follows a decade of undersupply combined with population growth, a property market upturn and keen investors wanting to take advantage of low interest rates.

Kim Hawtrey, associate director at forecaster BIS Shrapnel, said new apartment approvals were almost on par with the last peak, in 2003, when annual approvals hit 23,000 in NSW. “We’re close to exceeding that and will easily go beyond it next year. We think it will peak at 25,000 in 2016,” he said.

Australia’s attractiveness to Asian-backed developers and individual investors has also boosted construction levels. The money flowing in from Asian groups, and Australian-born ­Chinese, sets this upturn in unit construction apart from previous spikes.

Developer Australand’s NSW residential division general manager Nigel Edgar said buyers were also owner-occupiers wanting to live near the central business district but were priced out of the housing market, plus first-home buyers encouraged by state government grants for new dwellings.

The apartment boom will reshape the CBD as more office blocks are converted to apartments and others knocked down and replaced by new apartment towers. New stock is also changing inner suburbs where industrial sites were rezoned, such as Mascot, Zetland and Waterloo.

CBD opportunities are attracting hundreds of millions from offshore developers. Macquarie Capital is marketing the Ausgrid office tower on George Street and original price expectations were around $120 million. ­Property pundits in the CBD market say offshore residential interests are circling and there is talk of $200 million-plus offers from Chinese, Malaysian and Singaporean groups.

Read more: http://www.afr.com/p/business/property/sydney_apartment_boom_will_be_biggest_1QkM4SiJnRWYE2rR7DFgVI
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Shadow
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The Sydney construction boom that kicked off in early 2012 is now up to 2002-2003 boom levels, in terms of dwelling approvals.

I expect this boom to peak sometime around 2016...

Posted Image
Edited by Shadow, 12 Nov 2013, 09:09 AM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Dr Watson
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Shadow
12 Nov 2013, 09:04 AM
The Sydney construction boom that kicked off in early 2012 is now up to 2002-2003 boom levels, in terms of dwelling approvals.

I expect this boom to peak sometime around 2016...
The Hong Kong-ification of Sydney?
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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Sydneyite
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Shadow
12 Nov 2013, 09:04 AM
The Sydney construction boom that kicked off in early 2012 is now up to 2002-2003 boom levels, in terms of dwelling approvals.

I expect this boom to peak sometime around 2016...

Posted Image
I noticed in my local Cumberland rag the other day that there were pages and pages of (full page) adverts in the R/E section for off-the-plan purchases of new apartment developments all around the city. You used to see the odd one or two of these, but lately, at least a dozen pages of them or more. There is defintely a construction boom in Sydney underway right now.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Sydney heads for apartment surge

Sydney will be the epicentre of Australia’s next apartment boom according to forecasts that its multi-unit construction will be almost double that of Melbourne over the next five years.

The Housing Industry Association forecasts more than 25,000 apartment starts in NSW between now and July next year and a similar level of starts over the next four years.

In contrast, HIA forecasts that Victoria will undergo a quite dramatic slowdown in apartment development following three years of surging construction activity primarily in inner Melbourne, spurred on by demand from Asian investors…

Pushing more new home buyers towards apartment living are afford­ability concerns, a desire to live closer to the city and amenities, the sense of community offered in new developments, and a preference for more ­leisure time on weekends.

Read more: http://www.afr.com/p/business/property/sydney_heads_for_apartment_surge_ruNMZe9as5GPHwISMKzUHO
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Sydney's apartment construction boom: What does it mean for investors?

By Pete Wargent
Monday, 02 December 2013

If you live or work in inner Sydney, you'll only be too aware that the city is now well into a dwelling construction boom.

In particular, the inner city is seeing the building a new apartments aplenty.

The Reserve Bank will certainly be well pleased to see this, for part of their grand plan was for low interest rates to stimulate dwelling construction as the mining investment boom passes its peak and tails off.

And after years of weak supply, Sydney certainly needs the dwellings: the city's population is increasing by more than 60,000 persons per annum.

In the inner city and in parts of the inner south, at times it almost feels as though every available block is under construction.

This will lead, no doubt, to a spate of articles citing a forthcoming oversupply and a "major shake-out" coming.

And in certain sectors of the market, this may indeed be true.

In the central business district (CBD), Sydney tallest residential tower will soon appear. At Barangaroo, a whole new suburb is in the process of springing out of the ground, albeit with much of the space allocated for commercial ventures and parkland, in addition to a number of luxury apartments.

In the city's inner south, a huge amount of development is underway.

If you are a home buyer looking to stay put for a reasonably long period of time, then these new developments may suit you fine.

However, from an investors point of view, there is far better value and potential capital growth to be found elsewhere, in established stock within certain suburbs located a little way from the city.

For some there may be a time and a place for buying expensive apartments 'off-the-plan', but now is probably not that time.

Instead investors should look towards some of the favourably-located leafy suburbs which are located within easy striking distance of the CBD, but not in the CBD itself (where there are few height restrictions on building and there exists an oversupply risk).

Look to suburbs where there is no land available for release and where tall tower blocks will not be granted development approval, thus capping the population growth.

A small amount of redevelopment in a suburb can be a good thing, for the price of new stock can underpin existing dwelling prices, and a six pack of units where a house once stood is not going to suddenly cause an oversupply in a city with a population growth as strong as that of Sydney.

Over the last few years, relatively high vacancy rates in Melbourne led a number of bearish market commentators to predict a major correction in the city's wider housing market.

But while in certain high rise developments and suburbs prices may have stagnated, established stock in supply-constrained suburbs have defied the gloomy predictions and continued to demonstrate impressive rates of growth.

We'll likely see similar trends unfolding in Sydney. The city is not into a very strong growth cycle as I anticipated long ago, but capital growth does not continue forever.

When the next cyclical downturn arrives - be it in 2016 or 2015, or whenever - investors who hold well located stock close to the median price range in supply-constrained suburbs will be thankful. Those who own over-priced high-rise stock where vacancy rates are higher, will not.

Read more: http://www.propertyobserver.com.au/news/sydney-s-apartment-construction-boom-what-does-it-mean-for-investors/2013120166585
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I wouldn't be surprised if this apartment construction surge is primarily due to overseas investors in China and recently migrated Chinese.

I’m friends with quite a few recently arrived Chinese and their parents had already bought 1-3 apartments off the plan in the past two years.

The recent devaluing of our dollar (from 1.04 to around 0.92) already seemed to spark greater interest from their parents back home.

Some entire blocks or 90% are being sold to overseas investors.

Baby boomers down sizing are a drop in the ocean here.

I bought one as the yields were quite good compared to houses and villa units.

During my search I found many recently built apartments that I would not be able to live in, Melbourne is especially choc full on tiny apartments (35-55 sqm) with bedrooms that dont have windows and just enough room to fit a two seater couch.

There may be some local baby boomers downsizing into apartments but these may be the more high end larger two-three bedroom apartments on St. Kilda Road.
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