The construction of apartment buildings in Sydney over 2015-2017 will likely keep pace with previous activity levels according to a new report from property services firm JLL.
The Sydney Apartment Market Indicators report predicts that 61,000 new units could be completed over the period; however JLL’s probability weighted figures, which adjust the figures based on the likelihood of each project being completed on time puts the number of new units in Sydney by the end of 2017 at 46,500.
According to the NSW Department of Planning and Infrastructure's Metropolitan Development Program, 44,500 new units were built in Sydney from 2012-2014.
Director of residential research at JLL, Rupa Ganguli, said the consistent numbers were the result of people looking to take advantage of Sydney’s strong period of capital growth and the pipeline of construction will be welcomed by demand in the city.
“Based on our projections of the apartment supply pipeline, our view is that supply in the new apartment market will continue to meet buyer demand for multi-unit dwellings until at least the end of FY2016,” Ganguli said
“An undersupply in the Sydney market since even before the turn of the decade will not be corrected overnight,” she said.
The report predicts Parrmatta will see an increased amount of construction activity over the next two years and Ganguli believes that will be a trend that continues further into the future.
“From 2015 to 2017 the Parramatta
Local Government Area (LGA) will account for 8% of new apartment supply, which is 7% short of the share going to City of Sydney LGA,” she said.
“This gap of 9% has closed to 7% and we expect this trend to continue.”
Tryrone Hodge, JLL national director of valuations and advisory for NSW, said while development sites in proximity to the CBD are still in strong demand, infrastructure projects are helping other areas of the city grow in popularity.
“A more interesting trend that is developing are the corridors of activity emerging across the Greater Sydney metropolitan, driven by upcoming and existing transport projects,” Hodge said.
“Distinct concentrations of site sales are appearing across major transport lines such as UrbanGrowth's Central to Eveleigh corridor, the Northern and Western Line linking St Leonards through to Hornsby, Stage 1 of WestConnex between Parramatta and Haberfield, and the North West Rail link as a part of The Hills Corridor Strategy by the NSW Department of Planning & Environment,” he said.
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