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The Great Australian Appartsunami

Discussion in 'Where to Buy' started by hammer, 5th Oct, 2015.

  1. hammer

    hammer Well-Known Member

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    We've got more apartments than we can fill in most capital cities with heaps more coming online.

    Should we be concerned?

    Is this the way of the future?
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I thought there was a shortage!
     
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  3. JDP1

    JDP1 Well-Known Member

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    Concerned -no. Not unless you have most of your holdings in high rise stock

    Way of future - yes, that and building house+land packages in outer suburbs.
     
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  4. TMNT

    TMNT Well-Known Member

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    is there a deliberate typo in the title???

    I thought it was a combo of appartment and tsunami
     
  5. hammer

    hammer Well-Known Member

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    Oh no! Not deliberate...death by auto-correct....

    Fixed.
     
  6. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Temporary influx. Approvals have already peaked (see below)

    There will be some pain in the Melb, Bris and GC CBDs, and some spots in Sydney (west and inner south) but not much elsewhere.

    [​IMG]
     
  7. hammer

    hammer Well-Known Member

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    So er... are you going to be buying any inner city high-rise Terry?
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    certainly not!
     
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  9. JDP1

    JDP1 Well-Known Member

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    Yeah. They might have peaked for short term but I think there will be another round of approvals. The main reason being that they have actually sold well. It's not like they are languishing on the market for a long time. This will encourage more development and the govt will be happy to approve because this results in jobs of many kinds.
     
  10. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    @JDP1, you know there's quite a lag (2-3 years) between approval and construction, yeah?
     
  11. JDP1

    JDP1 Well-Known Member

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    Yep...but still...there will be more- might take 5+years, but there will be more approvals coming through. brisbane especially is a compact cbd and they are already talking about raising the height limit- and I'd suspect resi will take advantage of that more than commercial .
     
  12. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    @JDP1, you may be right. I will be a little surprised if approvals top their peak over the next 5 years but my crystal ball isn't perfect :)
     
  13. jpcashflow

    jpcashflow Well-Known Member Business Member

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    Hi,
    I have also noticed a influx of apartments being built in Melbourne West but what is scary is the following:
    1) Once they are fully built i find a huge amount of investors trying to flog them off.
    2) limited capital growth.
    3) In Melbourne there is enough land for out suburbs to growth with normal H and L packages.
    4) Landscape of work: This is also changing... more and more companies are work out of the city...
     
  14. MTR

    MTR Well-Known Member Premium Member

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    We have massive oversupply of apartments in Perth everywhere, but I think in the main inner city, prices have fallen due to this.

    Always expect a fall in prices if there is an oversupply of any stock regardless.

    MTR:)
     
  15. hammer

    hammer Well-Known Member

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    We've got a zillion here in Darwin as well. Prices haven't fallen a great deal though...
    Or maybe they have? The Asking prices haven't fallen a great deal at any rate.

    You would be brave up to buy inner CBD apartments in Darwin..
     
  16. hammer

    hammer Well-Known Member

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  17. Redom

    Redom Mortgage Broker Business Member

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    A good example of this was Spain - the supply/demand imbalance was massive.

    In Sydney theres been a serious shortage for close to a decade in the noughties, leading to some serious appreciation. Now there's a scenario Australiawide where supply > demand from the construction boom, but there's some catch up to be had and its a relatively marginal imbalance.

    Compared to other developed nations, i don't think 'concern' is a fair description - the oversupply isn't all that significant. You may see prices fall in some stock levels, but i don't think this will be a cause of sharp declines on its own.
     
  18. JohnPropChat

    JohnPropChat Well-Known Member

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    I think when the market starts falling, the glut of apartments will have a significant impact on all house prices as was evident in Melbourne and now in Perth.
     
  19. jaybean

    jaybean Well-Known Member

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    Using our already elevated level of apartments as a comparison, what are we talking about here? Twice as many? Ten times? I've never had a real sense of how bad it got in Spain and Ireland.
     
  20. Redom

    Redom Mortgage Broker Business Member

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    Ah to be honest i don't recall at the top of my head.

    But their property market crash was driven by developers and banks exposure to developers. They simply built wayyyyyy too many.

    From WIKI:

    Each year almost a million homes were built in Spain, more than in Germany, France, and England altogether.