…inner-city completions fall 21 per cent across Australian capital cities in 2019.
…a smaller amount of new projects started in the short-term, and most markets moving into a position of undersupply over the next few years, according to JLL research.
All stages of the national supply pipeline continued to contract in the final quarter of 2019, despite the strong rebound seen in the existing housing market over the second half of the year.
The national apartment supply pipeline followed a downward trend from 2017 with 2019 falling 30 per cent below the peak.
JLL’s head of residential research Leigh Warner said market confidence in the existing housing market had clearly rebounded to strong levels…
“With the long lead-times for larger apartment projects, this means it will take several years for the apartment supply pipeline to really ramp up again.
“In the interim, continued strong population growth in our major cities will keep underlying demand growth robust and see conditions tighten up quite quickly.
“The timing of this will be slightly different in each market, but we believe this will quickly become apparent in the rental market.”
Less than 2,900 apartments completed in inner Brisbane in 2019, which is around 60 per cent lower than the 7,000 apartments delivered in 2016 according to the research. – [Silverhall Comment – this significant supply contraction has been tracked by Silverhall and with falling rental vacancies, it is positioning the Brisbane market for good capital growth]
Sydney was at the other end of the spectrum—supply in inner Sydney only peaked towards the end of 2018 and across the entire city in 2019.
Recovery in the Melbourne market also relies on working through a little residual stock.
Somewhat elevated levels of new supply dampened the relatively small apartment markets in Adelaide and Canberra in the short-term.
However for Perth with recently introduced stamp duty incentives for off-the-plan purchases and very affordable prices should help demand “bounce back” after an extended period of weakness.