For the first time in the history of Australian Real Estate there have been more apartments built than houses. This sends obvious warning signs about oversupply in certain areas (as discussed at length in previous editorials), but what it also sheds a positive light on is the gold mine that houses will be come in the future as Sydney continues to grow up, rather than farther out.
For the first time in Australian history, more apartments than houses have been built across Australia, according to recent data from the ABS on Australian building approvals.
There were 28,527 units and just 28,102 houses built by comparison in the 2016 December quarter. As far as anyone can tell this may very well be a trend that will continue on into the future as apartment projects continue to be rubber-stamped by local councils.
Some of the fall out from this activity has been a tightening on banking lending practices, and in Victoria the stamp duty concession for off-the-plan investors is currently being removed.
This can lead us to many debates and healthy discussions about the future of real estate in this great land of ours, but as this trend of more units than houses continues, the realism of houses becoming a rare commodity for both investors as well as home owners cannot be denied.
At my upcoming free “Insight” webinar I’ll be discussing the key essentials to my personal investing strategy and the integral part timing both the markets and trends like this play, as well as affordable investment strategies for those who feel they’ve been priced out of the market. To register for this complimentary 30 minute webinar please click the link below now.
A question that is quite often asked is why these apartment projects are continually approved as part of the ‘Construction Boom’ that we have seen over the past few years? While there is no one answer to this, certain property and market analysts think that broader policy decisions are to blame.
Residential zoning is being continually changes to allow for more infill land areas to be designated for high-density living. Andrew Wilson, chief economist for the Domain Group, is far from surprised at this level of activity.
When speaking on this apartment issue recently he said, “These are the completions that were in the pipeline – this is reflecting the very strong approval data for 2014 and 2015”.
These decisions in regards to housing, residential development and urban sprawl will continue to have impact on local markets years into the future. As investors, it’s our job to remain informed.
To learn more about the fundamentals I believe all investors need to be aware of before they make their next investment register for my complimentary 30 minute webinar by clicking here now.