The apartment boom is over, but not a bloodbath: Nerida Conisbee
The apartment boom is over but it’s not a disaster, according to realestate.com.au economist Nerida Conisbee.
Despite some experts predicting a ‘bloodbath’ resulting from an oversupply of apartments in Melbourne and Brisbane, Conisbee suggests the reality is that there has been minimal fall out from the declining levels of construction.
"Building approvals are now trending downwards and although some apartments have lost value, the state of the market is pretty stable," she said.
Conisbee added that the level of building approvals for apartments will continue to decline in 2018 mainly because there are fewer investors in the market, but also because offshore developers, particularly from China, will be less active.
She tweeted a graph (below), highlighting the investor pullback.
She wrote "Investors are pulling back and this started to hit apartment demand in Sydney late last year. It is now extending to Adelaide. Meanwhile Perth seems to have turned a corner #housing#demand#property."
Click here to enlarge.
Envisaging a quieter housing market in 2018, there were four other key forecasts made by Conisbee.
1. US rate rises will make Australian mortgages more expensive, although the Reserve Bank of Australia is unlikely to budge on rates any time soon.
2. Sydney’s excessive housing price growth may soon be a thing of the past with demand decreasing and prices finally slowing down.
"In 2018 it’s unlikely we will see a big drop in prices in Sydney, but cooling demand will continue to affect house prices which are likely to be flat this year."
3. Look for the Hobart market to continue to rise in 2018.
4. Regional areas within commuting distance of Melbourne and Sydney have seen increasing buyer demand over the past 12 months on realestate.com.au.
The most active have been Central Coast and Wollongong, with many suburbs appealing to Sydney buyers on the basis of affordability if they’re prepared to do a big commute.
In Melbourne, Geelong has been the big winner of price pressures in Melbourne, however suburbs of Ballarat are now starting to appeal to first-home buyers from Melbourne as well.
This year, these areas will continue to see buyer demand grow as they offer not just affordable homes but also the lifestyle that people want.
