The Myth About Apartment Oversupply in Sydney

In an article for the website Your Investment Property, Phil McCarroll discusses whether Sydney has had its fair share of apartment supply and if it can afford any more anytime soon. While some fear apartment oversupply, there are many experts who feel that we are only catching up after a long period of undersupply.

Oversupply only compensating for a prolonged undersupply

Doubtlessly, we are building a really large quantity of new homes but a lot of this is an effort to compensate for our poor run and the undersupply we have witnessed for many years (which led to chronic housing shortage).

How the figures may pan out

At present, though we will keep constructing a fairly high number of houses, we will also keep seeing a housing deficit year after year.

You can read the original article here.

It is reliably predicted that we may be a good 190,000 homes short by the year 2024. This, despite the furious pace of construction. Perhaps what may hold us better is if we can somehow remove all the barriers caused by red tape and unwarranted compliance regulations from the mix.

Don’t build just for the sake of it

What we should also guard against is building just for the sake of it. Poorly developed buildings will create a ghetto effect and certainly not do anything to increase the comfort index. Such a turn of events is certainly a possibility given the greed of a number of developers and agents.

Sunset Clause

I feel that the Sunset Clause should be done away with. It has hurt the investor fraternity hard already in that it allows developers to cancel contracts if they pass their scheduled date of completion. Can’t we see how easy it is to tamper with the dates if developers find another buyer willing to paying a higher price?