Twenty-three cranes in the Canberra sky!
According to the RLB Crane Index® there are now 23 in Canberra, with eight cranes removed from sites and 14 cranes added since RLB's Q2 report.
The RLB report states "Construction work done in the Australian Capital Territory continued to grow, with FY 2018 recording the highest value in the last six financial years. Non-residential work was the main driver with a 21.1% increase. ACT's rise in work done is now observable within the index, with an increase of six cranes. Twelve new residential cranes commenced on projects around Canberra."
Riding the wave of new residential construction is the First Home Buyer (FHB) market, with ABS figures released for August showing FHB's share of the market rose to 18.0 per cent over the 3 months to August 2018. Nationally, this was the highest since late 2012. Although, FHB activity in the ACT has slipped in recent months and is now at 15.5 per cent.
However the ABS lending finance figures released this week show a more pessimistic story, with a investor lending falling in all State's except Tasmania (+8.2%). In the ACT investor lending has slipped 5.8%.
The reduction in investor lending is partly down to regulatory restrictions (APRA, Banking Royal Commission) as well as the fact that home prices are falling in several markets and rental price growth is rather weak in most places.
In the states where home building activity is weak, investor demand is a potential important source of recovery in the local market. In the larger cities where job creation is at very strong levels, it is important to ensure that the capacity of local rental markets expands in tandem. The near-universal decline in investor loans is bad news from both angles.