“In this year’s Housing Boom and Bust Report, we have crunched the numbers on the much talked about apartment oversupply while also predicting total supply by measuring new house completions,” said Christopher, one of Australia’s most recognised and respected property analysts.
Melbourne will record a 29% increase in completions as 2016 ends, with approximately 18,000 new apartments making their debut on the market. However, surging population growth in the city will absorb most of the new stock. In total, 35,000 dwellings will be completed, including 17,000 new houses.
“It may not come as a surprise that the CBD, Southbank and Docklands are the hot spots for development. These will be the epicentres of the apartment oversupply come later 2017 and 2018, though a growing population will absorb much of the new stock in time.”
In Brisbane, the report forecasts that apartment completions will drop by 11% in 2017 to 8,000 apartments before rising again by 12.5% to 9,000 apartments in 2018. Similar to Melbourne, the majority of these apartment completions will be in inner-city areas.
Christopher says there is strong evidence that Brisbane is already in oversupply, and this may become more apparent due to an unexpected increase in housing completions. “Brisbane will be completing 12,000 free standing dwellings this year, making for a total surplus of 8,000 dwellings in 2016, rising to a surplus of 13,000 dwellings in 2017. The Brisbane vacancy rate is already elevated at 2.9% and this will rise towards 4% next year,” he said.
As for Sydney, about 21,000 new apartments are expected to be completed by the end of 2017, up a further 5% from 2016. Completions for 2018 are forecast to increase by 19% over 2017, with a total of about 25,000 new apartments entering the market.
House completions in Sydney are expected to remain steady, ranging from 15,000 to 17,000 houses, with the bulk to be completed in Sydney’s North West. Surplus dwellings will remain moderate (4,000 in 2017 and 9,000 in 2018). However, it may become significant in 2018 when the total dwelling surplus is expected to reach 9,000 dwellings.
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