Apartment Supply Shortage to Hit by 2022
Slumping numbers of new apartments under construction could force an undersupply by 2022, property advisory group Charter Keck Cramer has forecast.
The demand-supply imbalance, according to Charter Keck Cramer's quarterly state of the market, is largely due to population growth and anaemic construction activity.
In Australia's biggest cities prices have strongly rebounded, with Melbourne lifting by 1.2 per cent over January, along with an increase of 1.1 per cent in Sydney.
The recovery has had little effect in stirring new development as the pipeline of new apartments continues to trend down.
While the number of residential cranes across the country's skylines retreated to 511 in the last RLB Crane Index count in September from 535 six months earlier.
Sydney completions over time
Sydney, which has been tipped by analysts to be set for a new boom, will require approximately 41,000 additional dwellings per annum to accommodate its current level of growth.
Over 2019, 5,700 apartments were launched in new projects across metropolitan Sydney—approximately 20 per cent of the 33,800 apartments launched in the peak year of 2015.
Construction commenced on 13,000 apartments—almost a 50 per cent decrease from the 24,700 commencements recorded in 2018 and marked the lowest number of commencements since 2012.
A total of 25,500 apartments were completed representing a 17 per cent decrease from the record 30,900 apartments completed in 2018.
Melbourne — which needs about 50,000 new dwellings a year to keep up with its growing population — launched just 6,300 new units, half the number of 2018 and the fifth year of decline from the 23,400 apartments in 2014.
Construction commenced on 12,400 apartments, a decrease of 6,200 from the 18,600 commencements recorded in 2018 and was the lowest number of commencements since 2013.
Upwards of 15,300 apartments were completed in metropolitan Melbourne, an increase on the 13,300 apartments completed in 2018.
Brisbane completions over time
Brisbane, which is likely to be the first east coast city to experience an undersupply of apartments, having turned down earlier, requires approximately 23,000 additional dwellings per annum to accommodate its growth.
In 2019 construction commenced on 2,100 apartments—a decrease of 3,000 on the 5,100 commencements recorded in 2018 and was the lowest number of commencements since 2010.
Apartment completions in Brisbane have fallen by almost half over the following two years, and in 2020 are on track to record the lowest level of completions since 2013.