Good News! South East Queensland is not oversupplied with dwellings

This post outlines the current state of play when it comes to new housing supply across SEQ.

And the good news is …the region isn’t currently oversupplied with new housing stock.Queensland Property

The Current State of Play

  • The SEQ new housing market was oversupplied between 2011and 2013.
    This was mainly due to too many new apartment buildings in Brisbane.
  • Since 2014, however, the new apartment approvals have fallen substantially.
    In addition, a lot of the approved new apartment stock hasn’t started.
    When they actually proceed will depend on demand.
    I anticipate that new apartment supply in Brisbane in coming years will remain subdued.
  • Whilst new dwelling registrations have increased in recent years – revisit the missive extra table – this rise is mainly for detached homes and townhouse style developments.

Dwelling Approvals

The graph above shows the interplay between housing demand and two measures of new dwelling supply – dwelling approvals and dwelling registrations.

Dwelling approvals (the grey line) is the beginning of the supply process.

Many new dwellings that are approved – and particularly in apartment projects – are not commenced as originally planned.

A more accurate measure of actual new housing supply is a dwelling registration.

This happens when the property title is transferred from the developer to the buyer and takes place at settlement.  See the red line in chart 1 above.

The lift in dwelling starts (registrations) is also in response to mounting population growth.  See chart 2 below.

Population Growth

 

End note

One of SEQ’s big plusses – when it comes to a safety net helping keep a floor under housing values – is that the region isn’t currently oversupplied with new housing stock. 

It might have been overcooked a few years ago, but that no longer is the case.

Good news!

Matusik Missive Extra…

South East Queensland – Underlying demand v new housing supply

Financial 
Years
Resident 
population
Dwelling 
approvals
Dwelling registrations
No Change No  Ratio  No Ratio
2000 2,395,700 48,946 28,411 2.4 26,664
2001 2,449,156 53,456 33,660 2.2 19,368 2.8
2002 2,516,705 67,549 34,464 2.0 22,593 3.0
2003 2,590,469 73,764 27,667 2.4 24,692 3.0
2004 2,658,670 68,201 26,593 2.4 31,895 2.1
2005 2,724,721 66,051 28,224 2.7 28,944 2.3
2006 2,789,506 64,785 31,379 2.5 27,111 2.4
2007 2,866,565 77,059 21,539 3.8 27,051 2.8
2008 2,945,505 78,940 25,889 2.2 25,825 3.1
2009 3,027,029 81,524 21,801 2.5 21,633 3.8
2010 3,084,703 57,674 18,717 3.9 19,755 2.9
2011 3,138,739 54,036 19,194 3.5 17,691 3.1
2012 3,211,500 72,761 29,899 2.0 16,193 4.5
2013 3,279,382 67,882 40,060 1.4 13,461 5.0
2014 3,338,475 59,093 45,617 1.5 17,883 3.3
2015 3,394,978 56,503 37,903 2.1 23,222 2.4
2016 3,462,230 67,252 37,560 2.4 26,361 2.6
2017 3,540,430 78,200 28,411 2.4 33,805 2.3
2018 3,630,360 89,930 33,660 2.2 28,729 3.1

Matusik + DNRME QVAS + ABS 3218.0, Regional Population Growth, Australia, various editions.  Matusik estimates for 2018 population growth. SEQ = LGA areas including Brisbane, Gold Coast, Ipswich Lockyer Valley, Logan, Moreton Bay, Noosa, Redland, Scenic Rim, Somerset, Sunshine Coast and Toowoomba (part a). 

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Michael Matusik

About

Michael is director of independent property advisory Matusik Property Insights. He is independent, perceptive and to the point; has helped over 550 new residential developments come to fruition and writes his insightful Matusik Missive


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