The JLL quarterly apartment market report landed this week with some welcome news for apartment owners.
Leigh Warner – Senior Director, Research, and Hollee Hart – Senior Analyst, Research, compiled the National report which finds “For apartments specifically, market balance is likely to tighten significantly. Supply levels continue to fall in most markets and at a national level will remain moderate for at least a few years yet”.
The quarterly report analyses the national apartment market and each capital city and finds while the Melbourne apartment market recovery is lagging other cities, it has been able to show growth despite the last few years of strong apartment supply and severe Covid lockdowns. It finds the number of new apartment completions in Melbourne over the last year is 7,100 which is a record 56% fall over the year to 3Q21. This drop in supply augers well for capital and rental growth especially considering the Melbourne and Sydney apartment markets will be the main recipients of international arrivals as the boarder restrictions ease over the next 12 months.
The report digs in to the widening gap in prices between houses and apartments which in Melbourne is now 36% vs 30% in Oct 2020 and suggests affordability will push demand back to apartments.
Michael Bleby of The Financial Review also covered the JLL report today and stated Australia was on the cusp of a rental affordability crises given the forecast surge in demand as boarders open up against a declining apartment supply pipeline. This will obviously result in a uplift in market rents.