East Coast Apartment Shortage On The Horizon | Kanebridge News
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East Coast Apartment Shortage On The Horizon

In the not-too-distant future, a slump in new apartments looms.

By Terry Christodoulou
Thu, Mar 10, 2022 4:31pmGrey Clock < 1 min

A drop in new apartment commencements across the east coast of Australia is setting the country up for undersupply of new homes in two years’ time — when migrants, skilled workers and international students are set to return.

Consultancy Charter Keck Cramer’s latest forecasts for Brisbane, Sydney and Melbourne predict this year’s 28,200 build-to-sell apartment completions across the eastern seaboard’s cities will halve in 2024 to 11,400.

The forecast indicates a ‘large shortage’ in the supply of the east coast which according to Charter Keck Cramer will reinforce warnings of a looming rental affordability crisis.

Rental markets are already tightening according to data from SQM Research. Here, the data indicated the national rental vacancy rate tightened by 0.3% to 1.3% in January — a 16-year low.

The Charter Keck Cramer report predicts 14,000 new build-to-sell apartment completions in Sydney this year, 9600 in 2023 and just 4500 in 2024. Elsewhere Brisbane, will see completions fall from 3100 this year to 2000 in 2023 and 1300 in 2024 while Melbourne will drop from 11,100 this year to 7100 the following year and 5600 in 2024.

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Data reveals house values have continued to decrease, but the rate has slowed as the RBA Board prepares to meet next week

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Thu, Dec 1, 2022 2 min

House values continued to fall last month, but the pace of decline has slowed, CoreLogic reports.

In signs that the RBA’s aggressive approach to monetary policy is making an impact, CoreLogic’s Home Value Index reveals national dwelling values fell -1.0 percent in November, marking the smallest monthly decline since June.

The drop represents a -7.0 percent decline – or about $53,400 –  since the peak value recorded in April 2022. Research director at CoreLogic, Tim Lawless, said the Sydney and Melbourne markets are leading the way, with the capital cities experiencing the most significant falls. But it’s not all bad news for homeowners.

“Three months ago, Sydney housing values were falling at the monthly rate of -2.3 percent,” he said. “That has now reduced by a full percentage point to a decline of -1.3 percent in November.  In July, Melbourne home values were down -1.5 percent over the month, with the monthly decline almost halving last month to -0.8%.”

The rate of decline has also slowed in the smaller capitals, he said.  

“Potentially we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards smaller value falls,” Mr Lawless said. “However, it’s fair to say housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.” 

The RBA has raised the cash rate from 0.10 in April  to 2.85 in November. The board is due to meet again next week, with most experts still predicting a further increase in the cash rate of 25 basis points despite the fall in house values.

Mr Lawless said if interest rates continue to increase, there is potential for declines to ‘reaccelerate’.

“Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire,” Mr Lawless said.

Statistics released by the Australian Bureau of Statistics this week also reveal a slowdown in the rate of inflation last month, as higher mortgage repayments and cost of living pressures bite into household budgets.

However, ABS data reveals ongoing labour shortages and high levels of construction continues to fuel higher prices for new housing, although the rate of price growth eased in September and October. 

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