Australia is heading for an apartment shortage within two years amid a slump in new listings being marketed.
With no pipeline of new dwellings being constructed, the volume of apartments being marketed has nearly halved over the past 12 months.
JLL’s head of residential research for Australia Leigh Warner spoke to the Australian Financial Review.
“The timing of this process will be slightly different in each market due to all having slightly different construction cycles, but by mid-2021 we expect all the major markets to be either back in, or very close to, a position of undersupply again,” he said.
“It’s still tough for developers in the short term and part of it is there is still residual stock in each of the markets that needs to be worked through.”
“What that means is that there is a lot of competition for developers out trying to sell off the plan.”
That pipeline of new apartments has been trending down for some time but there some green shoots coming through.
Official figures last week had a 16 per cent September spike in in apartment and townhouse approvals, which means future construction is on the way.
Here at home in Victoria, marketed apartments in Melbourne have fallen around two-thirds from their peak in 2017.
“Melbourne’s very strong population growth will help with the consumption of stock, but construction has been very concentrated in and around the CBD and there are some very large projects recently completed or soon to be complete that still have a large amount of stock to be absorbed first,” Mr Warner told AFR.