Unit Shortage Tipped In 2 Years

An oversupply of apartments in some east coast locations could turn into an undersupply within two years, as the pipeline of new projects peters out.

The latest JLL Apartment Market Outlook says the number of units coming on to the market will decline about 40% over the next two years. According to the report, there are 16,000 apartments under construction in Melbourne, 15,300 in Sydney and 8,800 in Brisbane.

Although plans are approved for another 60,000 apartments across the three cities, many are unlikely to go ahead.

JLL national director research, Leigh Warner, says the tightening of development lending -criteria mean few projects are starting. "We have seen a lot of supply in nearly all markets, historically strong levels of supply, so a breather and a slowdown is generally a good thing in all markets," he says.

He says an under?supply was a "very real possibility" beyond 2019 if, as expected, credit conditions remained tight.