Concerns about the over-supply of new apartments in Australia have been exaggerated, according to a leading online property agency.
iBuyNew CEO Mark Mendel said many developers with approvals in place for apartment complexes will not complete the project because they are unable to obtain finance.
“While there is a lot discussion about banks toughening their lending policies for buyers, they are even tougher on developers,” he said.
“Developers with no track record are getting a blanket ‘no’ from lenders across the board while those with a limited track record are also finding it extremely tough.”
Mendel, whose company focuses on off the plan apartment and townhouse sales, said it is too simple to say there is an over-supply of apartment complexes nationwide.
“You really need to look at the specifics of each state, region and suburb.
“There are definitely pockets of Brisbane, Melbourne and Sydney that may experience an oversupply of apartments.
“But if you look at Zetland/Waterloo in Sydney’s inner south where thousands of new apartments have been built over the last five years, everyone expected an oversupply but capital growth has still been more than 10% in the last 12 months.”