APARTMENT BUILDING BOOM HAS PEAKED, SAYS BIS SHRAPNEL

Written on the 1 August 2016

APARTMENT BUILDING BOOM HAS PEAKED, SAYS BIS SHRAPNEL NEW apartment commencements will decline by 50 per cent in the next four years from today's "unsustainable" level of 107,000, says today's BIS Shrapnel Building in Australia 2016-2031 report.

Total dwelling starts reached 220,100 in 2015/16, an all-time high, but the decline is expected to start this year and this will mostly be felt in the apartment building sector.

"While we are forecasting a fall in activity from its current peak, this will mostly be felt in the higher density segment of the market," says Associate Director at BIS Shrapnel, Dr Kim Hawtrey.

Attached dwelling starts are expected to fall from around 107,000 currently to just 53,800 by 2019/20.

Hawtrey says low interest rates have unlocked pent up demand and underpinned the current boom in activity, but with population growth slowing and a strong backlog of dwellings due for completion, new supply will outpace demand following the past couple of years of booming construction.

"This will see the national deficiency of dwellings gradually eroded and most key markets will begin to display signs of fatigue," says Dr Hawtrey.

Not even the continued undersupply in housing and strengthening economies in Sydney and Melbourne will be able to stop the slowdown. The national dwelling stock deficiency reached a peak of around 117,000 by June 2014, but this halved in the following two years to 58,000.

It is expected that investors will no longer fuel the market as they once did because of finance restrictions and first home buyers remain sidelined.

Victoria is expected to experience the most significant reversal of the eastern states of 17 per cent in the coming financial year, but Western Australia will fare worst as its residential construction contracts 19 per cent due to the end of the mining boom and softening population growth.

Non-residential building is expected to remain flat, with activity fluctuating between $30-$35 billion over the next four years.

Latest News

HOW INGRID BONNOR TURNED A LABOUR OF LOVE INTO A WORLDWIDE FASHION ICON

BEFORE Ingrid Bonnor started her bridal robe and feminine sleepwear company Homebodii in 2011, she didn't have an...

G8 EDUCATION EXECUTIVE CHRIS SCOTT RETIRES AS COMPANY CUTS CHINESE TIES

LONG-TIME managing director and executive of G8 Education (ASX: GEM) Chris Scott has announced his retirement, on ...

REGIONAL BANKS HIT OUT AT RATING CUT AND WARN BIG FOUR WILL BENEFIT

REGIONAL banks have hit out at a downgrade on their credit ratings, warning that it will increase their wholesale fun...

$71 MILLION SALE OF 'SYDNEY SIX' GIVES RISE TO WESTERN SYDNEY INVESTMENT HOTSPOT

SIX INDUSTRIAL assets in Sydney's West, dubbed the 'Sydney Six', have sold for a collective $71 million, ...

Related News

REGIONAL BANKS HIT OUT AT RATING CUT AND WARN BIG FOUR WILL BENEFIT

REGIONAL banks have hit out at a downgrade on their credit ratings, warning that it will increase their wholesale fun...

THE COMPANY THAT DECIDED IT WAS GOING TO GIVE A CRAP THANKS TO CROWD FUNDING

SIMON Griffiths is using toilet paper to save the world.

In 2012, on the back of an IndieGoGo crowdfunding campaig...

SURFSTITCH DOWNGRADES EARNINGS AS SHARES PLUNGE 25 PER CENT IN A DAY

TROUBLED online sports clothing retailer SurfStitch is considering selling off more of its assets and will close i...

AUSCANN RESUMES TRADE AFTER $12 MILLION CAPITAL RAISING

IT'S BEEN a big few days for medical cannabis manufacturer AusCann (ASX: AC8), as the company emerged from a trad...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter