Similar to those post Global Financial Crisis, a drastic decrease in residential buildings has developed market conditions that could lead to another price boom. Kerry Barwise, chief forecaster for the Australian Construction Industry Forum, says apartment and house building across the nation has dropped far greater than anticipated.
“New apartment starts in March Quarter dropped 41 percent last year at the same moment. It’s a drastic downturn. Those quarter on quarter numbers may be unstable, but that is far deeper than the anticipated 10-15 percent fall in 2019. House starts are dropping as well, but not as much, losing 8.6% over the same period. The whole industry for residential buildings is contracting.” he claims.
This implies that, as earlier expected, there will be no over supply of flats. It could imply that enhanced competition for less inventory could lead to substantial price rises as the market picks up again. According to Chief Economist for REA Group Nerida Conisbee. The present market signs are very comparable to circumstances after the global financial crisis and Sydney might again be the worst hit by increasing prices.
