Financing constraints will ensure less projects progress to the construction phase and that 2017 will be the peak of apartment completions.
Latest apartment supply figures from JLL show that strong levels of completions are expected over the remainder of the year that will see 2017 supply exceed 2016 levels. However, financing constraints in many markets continue to limit the number of new projects starting construction and is likely to see the level of completions fall substantially over the next few years according to JLL.
JLL’s Australian Head of Residential Research, Leigh Warner said: “The supply pipeline is already shrinking in those markets where supply fears have been of greatest concern. In particular, the number of apartments under construction fell in 2017 in Brisbane, Melbourne and Perth. Banks are certainly imposing much tighter lending conditions on developers in these markets and it is clear that in a more subdued demand environment, less projects are able to proceed to construction.”