On Monday, I reported on JLL’s latest apartment forecasts, which warned of a sharp slowdown in new apartment supply due to higher input costs and rising interest rates.
“Apartment supply will fall further in 2023 to low levels and stay moderate for at least several more years beyond that”, JLL noted:
And this “limited apartment supply pipeline means there is little relief on the horizon for renters”, according to JLL, given demand is rising fast on record immigration.
Now, Charter Keck Kramer estimates that around 41,200 apartments are under construction and being marketed across Australia’s capital cities in 2023.
However, the consulting firm expects this to fall to 27,300 in 2024 and just 11,100 in the following year.
Richard Temlett of Charter Keck Kramer says the 73% decline in apartment supply over the next two years will put a floor under prices, as well as worsen the rental crisis as immigration ramps up.
“For established apartments that have been built, I think the supply shortage and strong demand will limit the price declines”, Temlett told The AFR.
“For new products, prices are going to have to increase, and it’ll start increasing over the course of 2023 across most projects”.
“I think the government might have underestimated the extra demand for housing as a result of increased immigration”, he said.
“Looking at lead indicators such as student visa applications, or actual overseas arrivals, they’re much higher than what the government had forecast and particularly in Melbourne, I think it’s going to be even stronger than what they’re forecasting”.
“The supply situation is going to tighten and potentially even get worse”.
Clearly, the Albanese Government’s record immigration program is an unmitigated disaster in the making for renting Australians, who will find it even harder to secure accommodation at reasonable cost.
Where will the hundreds of thousands of migrants arriving this year and beyond live when there is already a severe short of accommodation for the existing population? On the streets?
The Albanese Government’s ‘Big Australia’ immigration policy is an inequality disaster of the highest order.
