TED TABET FRI 28 MAY 21
The national pipeline for new apartments is continuing its trickle, research released this week has revealed, with predictions that in three years it will be a quarter of 2018's level.
Despite variations across a multi-speed national market, overall, the new apartment inventory is trending down as an improving rate of sale absorbs existing stock, the latest Apartment Essentials report from planning consultancy Urbis shows.
The number of apartments launched nationally dropped from 5000 in late 2019 to 3250 in early 2021.
“It is clear the new apartment pipeline is grinding to a halt,” Urbis director Mark Dawson said.
“At this point the next four years are looking far leaner than the previous four years from a settlement pipeline perspective.”
Urbis now expects apartment settlements, which peaked at more than 40,000 in 2018, to shrink to 20,000 by 2022 and 10,000 by 2024 as developers continue to stall and hold back launching new projects to market.
Volume of apartments launched
^Source: Urbis
Less than 9 per cent of the total pipeline was now in pre-sales and the majority of apartment supply was approved but not yet launched to market, while 20 per cent of apartment volume has been deferred.
Clearance of available off-the plan stock increased to 20 per cent as a national average, up from 16 per cent in the previous quarter, led by stronger results in the Gold Coast, Perth and Brisbane Markets.
Sales during the quarter were mainly to owner-occupiers, who made up 62 per cent of all sales, double the 31 per cent figure of 2016.
Two- and three-bedroom apartments were the most popular for owner-occupiers, the report found.
During the first quarter, 62 per cent of sales were to owner-occupiers, doubling their share of sales nationally since 2016.
“We are currently at a stage where demand is about to overtake supply nationally, but the real tipping point for increased activity from developers will come when the speed of sales increases in the two biggest markets, Sydney and Melbourne,” Dawson said.
“The opening of borders and an uptake in international investment will be the biggest boost to these markets.”
Across the country, unit prices have started to recover, gaining 1.8 per cent during the first three months of the year and recouping all of the Covid-19-induced losses.