On Friday, the Reserve Bank of Australia (RBA) released its bi-annual Financial Stability Review (FSR), which warned that the flood of new high-rise supply across the East Coast capitals will likely lead to falling apartment prices and possible defaults from buyers and developers. Below are the key extracts.
The large number of new apartments recently completed and currently under construction in many capital cities raises the risk of a marked oversupply in some geographic areas. The banking system’s exposure to these apartment markets arises from its financing of apartment construction as well as lending to the purchasers of the apartments once construction is complete…
