Over the next four years, apartment construction is projected to fall by almost 40 per cent in NSW. What’s to blame for the decline? Meagre bank loans and rising restrictions on foreign property investment have stalled new housing starts of units, townhouses and semi-detached homes. The decline in housing starts will likely affect the rate of housing completions, which would drive already-high home prices even higher.
In an interview with The Australian Financial Review, I said that “rents will go up over time as this shortage becomes more acute.” Though the effects won’t be felt immediately in the market, we can look forward to a lower property supply and an ever-increasing demand for it. Read more about how a decrease in apartment construction affects our property market forecast here.