02 Jun New apartment supply to fall
The national pipeline for new apartments has slowed to a trickle. With future supply being one of the main factors influencing capital growth this is good news for existing owners and buyers.
We have anecdotally noticed the supply pipeline of new apartment developments to be shrinking but this week it was confirmed by Urbis in the National Apartment Essentials Insights Q1 2021 which found the national pipeline for new apartments to be very low. They predict within 3 years it will be just 25% of what it was in 2018.
Obviously each state and capital have variations but overall the trend is consistently showing a reduction in new apartment supply.
According to Urbis, apartment settlements peaked at around 40,000 nationally in 2018 and will shrink to 20,000 by 2022 and 10,000 by 2024, with developers holding back the launch of some new projects.
Owner occupiers continue to be the predominant buying group representing 62% of transactions nationally which is double the 2016 share of 31%.
It appears this trend will continue and while new supply will increase when international boarders open up, it will take several years for new projects to deliver new supply.