BIS Oxford Economics expects the post-Homebuilder lull to be shallow
A new report from BIS Oxford Economics suggests the apartment market has “passed the trough” brought on by regulatory-induced tight credit and the arrival of the pandemic.
The Oxford Economics report notes that apartments have managed to outpace other income investments, such as bonds or bank deposits.
“National gross rental yields have held between 4 and 5 per cent while term deposits and treasury bond returns have dipped below 2 per cent a year," according to the report author, Maree Kilroy.
"The yield premium accruing to units have never been this high.”
The recent dip in housing approvals in Australian Bureau of Statistics data has emerged across both houses and units.
BIS Oxford Economics economist Maree Kilroy said attached dwellings gained 4 per cent "with apartment construction looking to have passed the trough.”
Kilroy said the fading effect of the HomeBuilder program meant house approvals would continue to ease, while labour and material shortages would hit delivery times for new costruction.
“The core fundamentals underpinning new housing demand such as ultra-low borrowing costs, preference shifts, elevated household savings and rising property turnover will prevent a sizeable correction for house approvals nationally as we move into fiscal year 2022,” Kilroy said.