Apartment oversupply fears labelled crazy

by Julia Corderoy24 Sep 2015
As experts debate if Sydney’s price boom has run its race, there seems to be more of a consensus about whether the city is in danger of being hit with an oversupply of new apartments.

Reports earlier this week suggested that large scale apartment developments in areas such as Green Square could lead to the city experiencing a glut of new apartments, but those fears have been rubbished by numerous people with in the property and construction industries.

Harley Dale, an economist with the Housing Industry Association (HIA) said all current construction levels in Sydney are doing is catching up after a period of undersupply.

“There’s no doubt we’re building a record number of new homes this year but that only means we’re making inroads into a very large shortage of housing that has built up over many years,” Dr Dale told Domain.

“I think some people, as a result of that, are making sensationalist suggestions that we’re facing an Armageddon of sorts, and that the sky’s about to fall in on us,” he said.

Roy Marcellus, sales and marketing director at Developer Crown Group, also told Domain the idea of Sydney being hit by oversupply is “crazy.”

“That’s a crazy, a very crazy statement. We’re only catching up on a very big shortage of accommodation in Sydney,” Marcellus said.

“We have so many buyers and just nowhere near enough supply for them,” he said.

The opinions of Dale and Marcellus are seemingly supported by the economic forecasting firm BIS Shrapnel’s Building in Australia 2015-2030 report released in July.

The report predicts that construction levels in New South Wales will likely to continue to grow through 2015/16, with the state likely to continue to see a deficiency of dwellings.
 

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