I'm pleased to announce that the Urbanised Network (www.urbanised.net) has just commenced its research program. We have completed forecasts for houses and multi unit dwellings by each Council area for 2018. This is a beta model that is based primarily on Department of Planning and Environment data and the results at this stage should be treated as indicative only. We will be undertaking a consensus forecasting program later in the year for 2019 and we will be regularly refining our forecasting model.

The results of the beta model are quite interesting though and they highlight some market trends. Here are the results by the GSC Districts in Sydney only.

APPROVALS

District Houses Units Total 2017 YOY

Western        7936 3243 11179 13955 -19.89%
North 1321 4294 5615 6,673 -15.86%
South 1150 4707 5857 6640 -11.80%
Eastern City 1724 11463 3188 12,663 4.14%
Central City 260 10143 15403 13486 14.21%
TOTAL   17391 33850 51241 53417 -4.07%

COMPLETIONS

Western   6037 1733 7771 9127 -14.86%
North   275 3914 4189 6056 -30.83%
South   750 3013 3764 3557 5.81%
Eastern City 321 9879 10200 9345 9.15%
Central City 3892 8213 12106 10674 13.41%
TOTAL 11276 26753 38029 38759 -1.88%

As outlined earlier these are only indicative as approvals data has proven to be "lumpy" over time. At this stage of the cycle forecasting is difficult as developers will either go hard to complete so they are not left holding projects or they will simply land bank.

That said, at a macro level it wouldn't appear that the market will enter into a deep decline over the year. There is around a 2% drop off in completions and a 4% drop in approvals. It is anticipated that there will be roughly 38,000 completions for the year.

There are some interesting trends at the Council level. It would appear that a great deal of delivery will be occurring around infrastructure during the year with the Hills, Randwick, Strathfield, Parramatta and Canterbury Bankstown expected to grow year on year. It would also appear that Liverpool and most Councils in the Northern District are receiving considerably lower levels of approvals which seem to be feeding through to lower completion forecasts (although don't read too much into this as there maybe other "seasonal" factors influencing approvals).

Over the year we expect some new shocks to the forecasting model. The decision to suspend planning proposals will significantly influence completions as some of the Councils impacted are major contributors to completions. Another factor will be the phased removal of caps on developer charges. Once again the areas most impacted Councils are the major producers of stock. Finally, and not new, the availability of finance will be another important factor as 60% of dwelling completions is in units and they are more reliant on finance than land development.

We will be convening consensus groups of developers, builders and financiers to review the forecasts and market based risks to produce consensus style forecasting. Detailed forecasts are only available to Urbanised Network Advisors and Subscribers. To get access to the latest market intelligence join the Urbanised Network New Partner.

Development Market Outlook - Urbanised Releases New Research Program