This compares to the 44,500 net completions of multi-unit dwellings between 2012 – 2014, according to the NSW Department of Planning and Infrastructure’s Metropolitan Development Program.
However, the number of completions over the upcoming time frame is more likely to sit at 46,500 units, according to JLL’s probability weighted figures, which adjusts this number based on the likelihood of each project completing on a scale of “proposed” to “under construction”.
This adjusted figure is in line with the multi-unit completions between 2012 – 2014.
“The Sydney residential market continues deep into the eleventh hour of a housing upturn, as sellers take advantage of continued capital growth and buyers look for opportunities in a market offering plenty of choice in housing stock. Interest rates have remained stable and this reflects the general ‘wait and see’ approach that investors are taking.
“Based on our projections of the apartment supply pipeline, our view is that supply in the new apartment market will continue to meet buyer demand for multi-unit dwellings until at least the end of FY2016.
An undersupply in the Sydney market since even before the turn of the decade will not be corrected overnight,” said Ms Ganguli.
According to the report, Parramatta is increasingly becoming a destination of choice for apartment buyers.
“From 2015 to 2017 the Parramatta Local Government Area (LGA) will account for 8% of new apartment supply, which is 7% short of the share going to City of Sydney LGA. This gap is slowly closing, considering that between 2012 to 2014 18% of new apartments were completed in City of Sydney LGA, as opposed to Parramatta LGA’s share of 9%. This gap of 9% has closed to 7% and we expect this trend to continue,” Ms Ganguli said.
Ms Ganguli added that various pockets of new apartment supply were picking up across the Greater Sydney region, including in areas such as The Hills Shire, Auburn, Hornsby, Blacktown and Rockdale LGAs, against the traditional stronghold of apartment stock in Inner Sydney.
“Each has its own reason for the increase, although most share common themes of affordability, proximity to transport nodes, rising supply and increased infrastructure.”
JLL’s National Director of Valuations and Advisory – NSW, Tyrone Hodge, said solid demand for residential development sites in the inner ring 10 km around the CBD were now causing a convergence of prices for sites with development approval.
The construction of major new transport lines were also driving corridors of activity
“Waterloo, North Sydney, Botany and Surry Hills – these suburbs in the inner ring within 10 km from the CBD have recorded the highest number of residential development sites purchased in 2015 to August,” Mr Hodge said.
“At a macro level however, a more interesting trend that is developing are the corridors of activity emerging across the Greater Sydney metropolitan, driven by upcoming and existing transport projects. Distinct concentrations of site sales are appearing across major transport lines such as UrbanGrowth’s Central to Eveleigh corridor, the Northern and Western Line linking St Leonards through to Hornsby, Stage 1 of WestConnex between Parramatta and Haberfield, and the North West Rail link as a part of The Hills Corridor Strategy by the NSW Department of Planning & Environment.”
Mr Hodge added, “In line with residential development sites, prices of new apartments continue to be strongest in the Sydney City and Inner East precincts which have the advantage of both city and water views.
A convergence of prices at a one bedroom level shows, with the exception of Sydney City, that developers are competing on introductory one bed price points to lure lone person households at affordable rates.”