East Coast Apartment Shortage On The Horizon
In the not-too-distant future, a slump in new apartments looms.
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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.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Capital cities lead the way as median home values see clear upswing
2 min
Home values continue their upwards trajectory, recording the strongest monthly growth in 18 months, CoreLogic data shows.
The property data provider reports that their Home Value Index has noted a third consecutive rise in values in May, accelerating 1.2 percent over the past month. This is on the back of a 0.6 percent increase in March and 0.5 percent rise in April.
Sydney recorded the strongest results, up 1.8 percent, the highest recorded in the city since September 2021. The fall in Sydney’s home values bottomed in January but have since accelerated sharply by 4.8 percent, adding $48,390 to the median dwelling value.
Melbourne recorded more modest gains, with home values increasing by 0.9 percent, bringing the total rise this quarter to 1.6 percent. It was the smaller capitals of Brisbane (up 1.4 percent) and Perth (up 1.3 percent) that reported stronger gains.
CoreLogic research director Tim Lawless said the lack of housing stock was an obvious influence on the growing values.
“Advertised listings trended lower through May with roughly 1,800 fewer capital city homes advertised for sale relative to the end of April. Inventory levels are -15.3 percent lower than they were at the same time last year and -24.4 percent below the previous five-year average for this time of year,” he said.
“With such a short supply of available housing stock, buyers are becoming more competitive and there’s an element of FOMO creeping into the market.
“Amid increased competition, auction clearance rates have trended higher, holding at 70 percent or above over the past three weeks. For private treaty sales, homes are selling faster and with less vendor discounting.”
Vendor discounting has been a feature in some parts of the country, particularly prestige regional areas that saw rapid price rises during the pandemic – and subsequent falls as people returned to the workplace in major centres.
The CoreLogic Home Value Index reports while prices appear to have found the floor in regional areas, the pace of recovery has been slower.
“Although regional home values are trending higher, the rate of gain hasn’t kept pace with the capitals. Over the past three months, growth in the combined capitals index was more than triple the pace of growth seen across the combined regionals at 2.8% and 0.8% respectively,” Mr Lawless said.
“Although advertised housing supply remains tight across regional Australia, demand from net overseas migration is less substantial. ABS data points to around 15% of Australia’s net overseas migration being centred in the regions each year. Additionally, a slowdown in internal migration rates across the regions has helped to ease the demand side pressures on housing.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
