Four of the top 10 suburbs in a list of new housing completions in the Greater Sydney Region have been dominated by apartment construction, government data has shown.
According to the Metropolitan Housing Monitor released by the NSW government, just shy of 99% of total housing completions in the City of Sydney in the twelve months to April 2016 were apartments. Just 27 housing completions in the year related to detached houses.
The same was seen in southern Sydney suburb of Rockdale, where 98.7% of total housing completions were apartments. This was followed by Ryde and Parramatta, where 96% and 91% of new construction related to apartments, respectively.
These figures could add fuel to the debate over an apartment oversupply occurring in Australia’s eastern seaboard cities of Sydney, Melbourne and Brisbane, which has caused many lenders to restrict lending to high rise and high density apartment dwellings in several postcodes in these cities.
However, the CEO of property lobby, the Urban Taskforce, Chris Johnson, said the figures show Sydney is just falling into two types of suburb.
“There are those that are brown field apartment suburbs like Sydney, Parramatta, Ryde and Rockdale and those that are greenfield detached house suburbs like Blacktown, Camden, Liverpool, Penrith, The Hills and to a lesser extent Campbelltown,” Johnson said.
He said the Sydney market will actually need to be monitored for signs of a downturn, rather than oversupply, in the wake of increased tax surcharges on foreign investors announced in the NSW state budget.
“The Urban Taskforce will carefully monitor the new data on housing completions so that we can highlight just-in time actions that may be required to correct down turns. The recent imposition of an extra 4% stamp duty on foreign investors, the introduction of the additional 0.75% land tax from 2017, the downtime from council amalgamations and the trend to add value capture taxes to projects could slow down housing production.”
Overall, Metropolitan Housing Monitor shows a rolling annual completion count up to the end of April 2016 with 27,208 housing completions. This is 6,000 below the governments expected completions of 33,200 a year to match the 20 year growth projection of 664,000 new dwellings.