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June 4 2021

 
 
 
1. The building bonanza…

Total housing approvals hit 258k in April (+39% y/y and -9% m/m). And total detached housing approvals hit 181k (+67% y/y and +5% m/m). Approvals to renovate have also held at exponential levels!

Figures released by CoreLogic on Tuesday also showed Sydney house prices jumped another 3.5% in May to be 11% up over the quarter. The average house in the Harbour City is now going for $1.1m with units at $800k – meaning houses are about $117,000 pricier than at the end of February!

Total detached housing approvals:

Source: ABS


Source: Macquarie

2. The Capex boom…

I’m in the market for a new word to replace boom! But see below why you can add capex to the list of ‘booming’ things for 2021.

In the US there is record absolute, and growth, in US capital goods new orders ex defence & aircraft. It took around six years from the GFC to 2015 before a capex recovery emerged in the previous cycle. This one has taken approximately 13 months and has surged to the highest reading in its history. Delivery times for materials continue to extend though!

And in Aus, ABS data on March quarter private capex was well ahead of expectations. Total new capex was +6.3%qoq to $31.5bn – see the perfect ‘V’ shaped recovery below.

US Capital goods new orders

Source: Bloomberg

Aus private capex

Source: ABS

3. The M&A wave is upon us…

US and Aus data below on announcements YTD to May!

Source: Goldman Sachs

Source: Goldman Sachs