Construction levels to trend downwards from next month

By |
Australia’s building boom will begin to slow as soon as next month according to economic forecasting firm BIS Shrapnel.

Demand for detached housing is set to remain high, however and wave of recently completed apartment projects will push the multi-unit sector into oversupply, resulting in a drop in construction levels.

"The important story here is apartments. To read the current cycle is to read the apartment cycle," BIS Shrapnel associate director Kim Hawtrey said told Fairfax media outlets.

"Detached houses will continue on being built. It's like the grandfather of housing. They will keep going on after the party finishes,” Dr Hawtrey said.

Speaking at the BIS Shrapnel's Forecasting Conference this week, managing director Robert Mellor said Brisbane in particular was about to see an unsustainable level of apartments come online.

“We think there’s just too much building,” Mellor.

“They’re building about two to three times the level that they were building on average over the last 10 to 15 years,” he said.

Mellor’s comments are at odds with the Place Advisory report into June quarter off the plan sales in Brisbane, which this week said the city was trending towards an undersupply of units.

“With more residential tower cranes dotting the Brisbane skyline than many people have ever seen before, supply concerns are constantly raised by buyers, developers and industry consultants,” Place Advisory report author Lachlan Walker said.

“Given historical quarterly sales rates and current demand, the availability of Inner Brisbane apartments remains undersupplied,” Walker said.

In the same interview to Fairfax, Dr Hawtrey said BIS’ predictions of a construction slowdown and oversupply will bring cause capital growth to either fall or stagnate.

Generally, prices are already falling in Perth, and in Adelaide. There is limited upside in Melbourne and Brisbane," he said.

"Sydney will have price increases for another six months but after summer, the rate of increase will go sideways."
 

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Top Suburbs : the basin , wentworthville , goulburn , scarborough , springwood

go back

Get help financing your investment



Do you need help finding the right loan for your investment?


When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here