MS sees dwelling boom peak

From Morgan Stanley:

Crucial housing data out today confirms a surge in apartment supply, with total completions setting a record at >200k (MSe demand ~160k). Signs of an activity inflection are welcome, but play into our weaker GDP growth outlook. Near-term apartment settlement risks are elevated.

Housing debate still unresolved: In September 2015, we called for a peak in housing market conditions,and flagged the risks from a looming oversupply and macroprudential tightening. These steps looked effective last summer,as sentiment and price growth cooled off. But more recently, stronger auction clearance rates,a surge in approvals and a reported price surge have muddied the outlook,and perhaps allowed some complacency to creep into consensus.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.