The Australian residential building boom continues to defy expectations of a downturn, led by a recent surge in approvals for apartments.
Research from property data firm Corelogic has revealed the potential number of new units set to be completed over the coming years.
Over the next 12 months, it is expected that an additional 94,471 new units will be completed nationally which represents a 3.5 per cent uplift in total unit supply.
Over the next 24 months, the unit supply uplift is expected to be much greater at 251,751 units which is an increase of 9.3 per cent on current supply.
Unit statistics and forecast upcoming settlements (greater city area)
|GCCSA Region||Total units||Potential new units next 2 years||Expected % increase next 2 years|
|Rest of NSW||196,795||10,296||5.2%|
|Rest of Victoria||77,806||3,148||4.0%|
|Rest of Qld||248,156||15,855||6.4%|
|Rest of SA||9,217||220||2.4%|
|Rest of WA||35,525||802||2.3%|
|Rest of Tasmania||13,266||565||4.3%|
|Rest of NT||3,529||89||2.5%|
|Australian Capital Territory||67,433||3,484||5.2%|
Across the Greater Capital City Statistical Areas (GCCSA), Sydney and Melbourne are expected to see the greatest increase in unit supply over the next two years.
In the face of weakening housing market conditions, both cities have retained a high volume of unit stock to be completed.
While investor demand has waned in Brisbane and Adelaide with lower unit settlements, the appetite for units is still strong among owner-occupiers.
Both cities are expected to see the greatest percentage increase in new unit supply over the next two years, with data suggesting an uplift of 18.4 per cent and 12.5 per cent respectively.
“Brisbane has already felt the effects of unit oversupply and although there remains a large number of units to be completed, the construction cycle peaked almost two years ago and the city is already starting to see some moderate rises in values and rental rates,” CoreLogic research analyst Cameron Kusher said.
This is due to a stable economic outlook for both states, employment opportunities, continued population growth and increased investment in infrastructure that will bolster demand in the apartment market across the next few years.
Top 20 regions for forecast new units over the next two years
|SA3 Region||State||Total units||Potential new units next 2 years||Expected % increase next 2 years|
|Sydney Inner City||NSW||117,944||7,202||6.1%|
|Whitehorse - West||VIC||19,347||4,659||24.1%|
|Ryde - Hunters Hill||NSW||31,236||4,460||14.3%|
|Strathfield - Burwood - Ashfield||NSW||40,932||4,116||10.1%|
|Blacktown - North||NSW||3,080||3,945||128.1%|
|Darebin - North||VIC||16,519||3,154||19.1%|
|Holland Park - Yeronga||QLD||13,316||2,889||21.7%|
Of the top 20 regions expected to record the greatest number of new unit settlements over the next two years, regions of Melbourne have dominated with 36,000 new apartments forecast.
“The main difference across the capital cities is that Sydney’s supply of units is set to increase across geographically diverse areas along transport spines while most other cities are seeing the supply increase exclusively within inner city areas,” Kusher said.
Inner Brisbane is expecting an additional 9,732 units over the next two years which translates to an increase in overall unit supply of 29.7 per cent.
Melbourne City is expected to see an 8.1 per cent increase with an additional 8,040 units while inner city Sydney is set to add an additional 7,202 units, an uplift of 6.1 per cent.