Over the next year, the onslaught of new supply, especially in Melbourne, will start to hit the market at the same time as the interest rate cycle begins to turn. Over the next 12 months it will become clear that interest rates have bottomed and the next move will be up.
…And that’s likely to coincide with a massive boost to supply, primarily in the apartment segment. As Alliance Bernstein Asia Pacific senior economist Guy Bruten puts it, a 40 per cent plus increase in the number of dwelling starts is a “meaningful swing” in the supply picture, particularly against the background of slowing population growth.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
