Hello capex cliff round two:
Following our recent review, we have increased our Australian housing starts assumptions 7% in FY17 (following higher than expected 2HCY16 starts), and reduced forecasts in FY18 to 198k units (100bp reduction vs our previous FY18 growth assumption) and FY19 to 177k units (800bp reduction vs our previous FY19 growth assumption).
The key reason for our reduced expectations is our expectation for a weaker multi-family sector due to: 1) increased interest costs for investors; 2) increased stamp duty relating to foreign investors; 3) affordability remains an issue in NSW in particular.
