While Sydney's apartment market managed to bounce back during the second half of 2019, investor demand remained muted, according to the latest research from JLL.
There were 7,240 apartment completions in Sydney last year, representing a 31% decline from 2018.
"Apartment completions are expected to fall further over the next two years, with around 3,500 apartments due to be completed per annum in 2020 and 2021," said Leigh Warner, senior director and head of residential research at JLL Sydney.
The decline is expected despite the increase in the number of approved projects during the fourth quarter of 2019. Warner said these approved projects are likely to face delays given the muted off-the-plan sales.
Also read: Where is Sydney's unit market going?
"Supply data showed than the number of apartments currently marketing declined by 54%, which means that planned projects still are not garnering enough interest or funding to proceed to the marketing and construction stages," he said.
Still, apartment prices in the city increased by 3.4% year-on-year during the last month of 2019.
On the rental market side, median rents continue to decline despite the decline in vacancy rates.
"Supply levels fell sharply in 2019, which will help quickly rebalance the market. However, even with falling supply, recent price growth is likely to moderate as listings in the existing market rise in the short-term," Warner said.
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