Australia's 25 apartment construction hotspot localities: CoreLogic RP Data
Apartments are being built at a record-breaking pace.
The table below, supplied by CoreLogic RP Data to the BusinessInsider website, contains the top 25 locations for expected apartment completions over the next 24 months.
Dominated by Australia’s most populous states, New South Wales, Victoria and Queensland, CoreLogic RP Data calculates that there’ll be 231,129 new apartments built over the period.
With so much stock coming online at once there is increasing concern as to whether settlement valuations will actually meet the contract price of units in some of these locations.
Cameron Kusher, research analyst at CoreLogic RP Data, suggests that tighter restrictions on investor and overseas buyers from Australian banks could amplify settlement risks.
“Mortgage lenders have recently tightened their lending criteria, subsequently some people who have committed to off-the-plan units may not be able to borrow as much as they could at the time of signing the contract,” says Kusher.
“To compound the situation, three of the four largest banks have announced they will no longer be lending to overseas home buyers which may result in a larger number of contracts not progressing through to settlement, considering a larger proportion of off the plan unit sales are to overseas buyers.”
As a result of these factors and increased supply in some regions, Kusher believes there is a clear risk that some properties may be be worth less than the price they were purchased for off the plan.
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