According to a new report by industry analyst and economic forecaster BIS Shrapnel, the residential building boom around Australia could lead to an oversupply of housing stock in the national property market by 2018.
The Building in Australia 2015-2030 report suggests that Australia’s housing stock deficiency has already reach a peak and that supply could begin to outpace demand over the next three years, due to slowing population and economic growth, and growing affordability concerns in some local and regional markets.
Construction on a record 203,760 new dwellings begun over the 12 months to March, according to ABS figures. This unprecedented level of activity has been the result of record low interest rates and, “a sustained period of underbuilding” that went before, according to Dr Kim Hawtrey, associate director with BIS Shrapnel.
Hawtrey adds: “As population growth slows while construction activity remains strong, new supply will begin to outpace demand. This will see the national deficiency of dwellings gradually eroded and some key markets will begin to display signs of oversupply.”