Housing supply outpaced by 2018: BIS Shrapnel

Housing supply outpaced by 2018: BIS Shrapnel
Housing supply outpaced by 2018: BIS Shrapnel

New housing supply is expected to outpace demand mid 2018 with investors, upgraders and downsizers predicted to drive the national market during the short term.

BIS Shrapnel's Building in Australia 2015-2030 report, based on household formation per thousand of people, noted after sustained period of underbuilding, new dwelling supply is now exceeding demand and predicts the national deficiency will have been largely satisfied by 2018.

BIS Shrapnel associate director Dr Kim Hawtrey said national activity is forecast to begin trending down over the following three years (from 2014/15), with the 'high-flying apartments sector leading the way down'.

“After recording strong growth over the past few years, we estimate that total dwelling starts reached just over 210,000 in 2014/15, an all-time record high,” Dr Hawtrey said.

“Low interest rates have unlocked significant pent up demand and underpinned the current boom in activity, but as population growth slows while construction activity remains strong, new supply will begin to outpace demand.

"This will see the national deficiency of dwellings gradually eroded and some key markets will begin to display signs of oversupply.”

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Housing supply outpaced by 2018: BIS Shrapnel

The report said despite a sharp decline in 2014/15 (-13%) non-residential building commencements are expected to bounce back in 2015/16 (+10%) to $33.42 billion (constant 2012/13 prices).

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