It seems Santa’s sleigh could be bringing us all more apartment towers this holiday season with recent reports revealing that at least twenty suburbs from around Australia are expecting levels of apartment supply to balloon in the next 24 months. The issue is, that as this huge volume increase of new stock comes online over the next two years, it may affect more properties than just the units in question, including yours.
The latest CoreLogistic Settlement Risk Report highlights ongoing concerns about the likely effect of increasing levels of oversupply as new stock floods the market. In addition, a report from CoreLogic states these increases could be between 11% and 34% in some areas.
In terms of absolute volume, Melbourne City is expected to add a whopping 16,354 units over the next 24 months, while inner city Sydney and inner city Brisbane are each expect to add more than 10,000 units.
Granted, Sydney and Melbourne are big cities with big population growth on their hands, and in the right suburbs these new apartments will not cause any issues. But identifying the “No Go Zones”, or areas of major concern that investors should steer clear of will be the major focus of my free events that commence early in 2017.
Whilst Brisbane and Melbourne have the biggest exposure to such risk, Sydney is also exposed amid the spiralling cost of new units and the city’s exposure to foreign purchasers who are finding money harder to come by.
However, Sydney-siders have an ace in the hole that our neighbours north and south of the boarder do not… and it comes in the form of Harry Triguboff.
As the Australian Business Review stated in October this year, Sydney has Meriton’s Harry Triguboff up it’s sleeve. Triguboff owns some 70,000 apartments in Sydney without any debt. He alone can potentially cushion the impact any oversupply has on the city.
“Melbourne and to a lesser extent the already depressed Brisbane will feel the full force of any disaster” says the Australian Business Review.
I believe this issue will shape the investing landscape (pardon the pun) dramatically for 2017. To hear more of the next property shifts I anticipate appearing early in the New Year please click here to register for a complimentary event near you.