One of the eye-opening statistics of the high rise apartment boom is that there are now more cranes servicing high rise apartment construction down the east coast of Australia than in major cities across North America.
- Record 528 cranes working on Sydney, Melbourne and Brisbane apartments
- Only 419 cranes working on apartments in major North American cities
- Crane count in Sydney has boomed to 258, Melbourne and Brisbane now easing
The biannual crane count survey by global property and construction consultants Rider Levett Bucknall (RLB) found there were a record 528 cranes working above apartment blocks in Sydney, Melbourne and Brisbane in the September quarter.
The RLB survey tallied 419 cranes plying their trade in the residential construction game across major North American cities including New York, Boston, Chicago, San Francisco, Los Angeles, Toronto and up to Calgary.
Over the past three years, the number of cranes in use for residential construction has grown an extraordinary 313 per cent.
However, growth has moderated sharply over the last quarter, with the number of cranes in Melbourne down from 124 to 109 and Brisbane down from 91 to 87.
Sydney is still booming, though, with residential cranes increasing from 239 to 258 over the past six months, while for the rest of Australia conditions were fairly flat with just three new cranes added to take the total to 74.
The number of cranes on residential building sites is up 313 per cent in three years. (Supplied: RLB, UBS)
Brisbane an inner-city boom, Melbourne and Sydney sprawl
The RLB activity heat-maps found that the demographics of the apartment super-cycle vary markedly between the cities.
While the maps count the total number of cranes, they are a very good proxy given 80 per cent are now assigned to high-rise dwellings, compared to less than 50 per cent in pre-boom days.
Activity in Sydney is spread out across large parts of city.
Sydney has a very wide distribution of cranes working on residential construction.
(Supplied: RLB, UBS)
The heat in Melbourne is centred on the CBD and Southbank, but also spreads out into the suburbs.
Melbourne cranes are concentrated near the CBD, but with some in the suburbs.
(Supplied: RLB, UBS)
The apartment boom in Brisbane is very much an inner-city phenomenon.
This slowing in high-rise activity in Melbourne and Brisbane may be an early indicator that the boom’s peak is nearing and construction will start to roll over.
Morgan Stanley recently estimated that the oversupply in the sector would be around 100,000 units which could spark a sudden downturn which in turn put around 200,000 jobs at risk.
Another investment bank, UBS, argues there is still a fair way to run in the boom, having raised its forecast for overall housing commencements to a record 228,000 in 2016 and a still strong 205,000 before easing back in 2018.
Completions are expected to peak in 2018 at 216,000.
“But within this, completions of (free-standing) houses already peaked last year, while in contrast the multi’s super-cycle is still only about half done, with the number of units completed in 2018 likely to end up well over double the pre-boom trend,” UBS economist George Tharenou noted.