According to property advisory firm Charter Keck Cramer, Sydney, Melbourne, and Brisbane will suffer a shortage of new housing by 2022, as the construction of new high-rise dwellings dwindles. “By the end of 2021, all the East Coast capitals are facing a significant shortage,” says national director of research and strategy Rob Burgess.
Last year, 6,300 new units were launched by Melbourne which needs about 50,000 new dwellings a year to keep up with its growing population.
The new apartment releases from Metropolitan Sydney last year amounted to 5,700, well down from the 16,300 releases in 2018. While Sydney is larger than Melbourne, it has slower population growth, which means it needs about 40,000 new homes each year and 60 percent would traditionally be apartments.
“Sydney faces a very significant supply issue pushing into 2022,” Burgess says. Brisbane, which ended its slump in the development cycle of apartments faster than the two southern cities, even experienced a fourth straight year of fewer new unit openings, though the investment property loan rates downturn slowed.
Instead, the market slowdown pushed back many completions and this year will likely to mark the peak with 19,900 completions, Mr. Burgess said. “We’re headed for record completions in Melbourne,” he said.
“Part of the reason for that is that once the market started slowing down, the marketing and sales cycles stretched out significantly. What had been a marketing campaign lasting six or eight months was forced into a program of 12 to 14 months.”