Is Australia Running out of Apartments?

Strata Snaps: June 10, 2021

Another short sharp pointer to interesting and newsworthy strata stuff …

I’m getting confused about whether there are more or less new strata apartments being built in Australia as my Strata Snaps on May 6 ‘Downs & Ups in new strata building approvals …’ outlined.

ABS Statistics showed a significant drop in new apartment starts in 2020 but an upswing earlier in 2021. Apartment price movements and rentals are general down on historical levels and compared to free-standing housing. But, the demand for strata building services [management, trade, professional, etc are increasing].

So, what gives?

According to Urbis in its Apartment Essentials Dashboard, and The Urban Developer in its article ‘Apartment Shortfall Predicted Despite Sales Recovery’ there’s definitely a slowdown and they make the following prediction based on their graph:

‘apartment settlements, which peaked at more than 40,000 in 2018, to shrink to 20,000 by 2022 and 10,000 by 2024 as developers continue to stall and hold back launching new projects to market’

Source: Urbis 2021

Since there are multi-year lead times for larger strata apartment developments less new development starts will inevitably mean fewer development finishes down the track. So, the prediction must be correct in the shorter to medium term.

These kinds of predictions are important to strata stakeholders as they will affect many decisions about strata ownership, operations, and management.

So, what could or will you do differently in strata as a result of these predictions?

Thanks, @TheUrbDev and @UrbisAustralia

June 10, 2021

Francesco …