Showing posts with label undersupply. Show all posts
Showing posts with label undersupply. Show all posts

Sunday, November 13, 2022

Brisbane Apartment Growth Looks Promising

The AFR had this story:

"... As rising funding constrained development in the face of rising demand from a return of foreign migrants, and changes to household formation that meant more single-person households, the Queensland capital was going to suffer from the most acute undersupply, Mr Warner said.

“Brisbane is the worst placed in my view,” he said.

“The supply is so low and the Queensland population growth is strong and likely to stay strong because we’ve had strong interstate migration through the pandemic and now overseas migration is picking up as well.”

The decade-long run-up to the 2032 Olympic Games was going to sustain a level of activity in south-east Queensland region, he said.

“We’ve got a pipeline of infrastructure projects with the Olympics for the next decade that’s going to keep employment strong and keep driving population into south-east Queensland,” Mr Warner said.

The current supply slated for the city was about half of its underlying demand, he said.

More widely, the concern was about not just the number of new apartments in the pipeline but the type.

“Most developments progressing to construction right now are aimed at owner occupiers, particularly downsizers with plenty of equity, and this will do little to alleviate the rental market crisis that is already upon us,” he said."

See Rising borrowing costs put the brakes on apartment pipeline (AFR 13 November 2022)

https://www.afr.com/property/residential/rising-borrowing-costs-put-the-brakes-on-apartment-pipeline-20221110-p5bx7u


Saturday, February 29, 2020

Brisbane Apartment Supply - Undersupplied?

Brisbane is predicted to be the first east coast city to experience an undersupply of apartments, having turned down earlier.  According to experts, Brisbane 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.


One real estate agent's reaction:  The agent said the impending undersupply of apartments signals a likely ‘step up’ in market values for second hand units.  There is excellent value-for-money in the CBD with established apartments in great locations. New and ‘off the plan’ units are already selling for 15-20% more than existing stock.

Friday, August 1, 2014

Housing Price Supply and Demand

From the AFR on 30 July 2014, p. 28

"Recent house price appreciation has been driven by more than simply a strongly growing population.  Low interest rates have encouraged domestic investors to allocate assets into housing.  Foreign investors have also been buying.  A reduced rental return on housing would eventually discourage domestic investors but probably comes with a lag.

The apparent equalisation between an undersupply of housing versus strong demand for dwellings in major metropolitan areas comes as the official cash rate remains at a record low of 2.5%, and as the major banks lower their fixed rate home loans in an attempt to entire more people to borrow more."

This article applies more to the Sydney and Melbourne markets than Brisbane.  It is important to look at individual markets, and not take southern trends and blindly apply them to Brisbane.

Tuesday, July 24, 2012

Oversupply of dwellings in Australia

"The 2011 Census revealed Australia had 7.8 million households, 900,000 lower than the NHSC’s figure, with population also growing by 300,000 less than previously estimated. These figures have come as such a shock that the NHSC chairman has reported that an undersupply could be incorrect. In fact, Morgan Stanley researchers have found that the current 228,000 dwelling undersupply has now become an oversupply of 341,000, a huge turnaround."

See: Don't be dudded by housing data

Thursday, December 22, 2011

Housing Shortfall in Queensland?

"Australia's housing shortfall is expected to blow out to more than 640,000 in 20 years, prompting industry calls for tax cuts and other measures to stop prices going through the roof.

The gap between demand and supply increased by 28,200 to 186,800 housing units this year, a National Housing Supply Council (NHSC) report reveals.

The annual report on the state of supply shows NSW and Queensland had the largest shortfalls of 73,700 and 61,900, respectively."

See Business Spectator