Units offer affordable options for many looking to enter the housing market for the first time, down size or simply own a pad close to a city centre.
The CoreLogic Property Pulse, analyses the CoreLogic Settlement Risk data to show the potential number of new units set to be completed over the coming years and just how the numbers look.
Over the next 12 months, an additional 94,471 new units will be completed nationally.
This figure represents a 3.5% uplift in total unit supply. Over the next 24 months, the unit supply uplift is expected to be much greater at 251,751 units which is an increase of 9.3% on current supply.
Across the Greater Capital City Statistical Areas (GCCSA), Sydney (76,977) and Melbourne (78,689) are expected to see the greatest increase in unit supply over the next two years.
While the number of unit new units due for settlement is much lower in Brisbane and Adelaide, these two cities are expected to see the greatest percentage increase in new unit supply over the next two years, with CoreLogic data suggesting an uplift of 18.4% and 12.5% respectively.
The top 25 SA3 regions are expected to record the greatest number of new unit settlements over the next two years, Brisbane Inner is expecting an additional 9,732 units over the next two years which translates to an increase in overall unit supply of 29.7%.
Melbourne City is expected to see an 8.1% increase in unit supply over the next two years with an additional 8,040 units while Sydney Inner City is set to add an additional 7,202 units, an uplift of 6.1%.
The top 25 list is dominated by regions of Melbourne which account for 12 of the 25 regions listed while Sydney accounts for nine, Brisbane three and Perth one.
The main difference across the capital cities is that Sydney’s supply of units is set to increase across geographically diverse areas along transport spines while most other cities are seeing the supply increase exclusively within inner city areas.
Over the past five years we’ve seen a significant increase in overall unit supply.
At the same time, housing market conditions have deteriorated over the past year, particularly in Sydney and Melbourne, with dwelling values falling and rental growth slowing.
In the face of weakening housing market conditions, both of these cities retain a high volume of unit stock to be completed.
As the new supply comes on line over the coming years, it is anticipated that this could lead to further Unit statistics and forecast upcoming settlements by GCCSA Top 25 SA3 regions for forecast new units over the next two years softening of both dwelling values and rents in Sydney and Melbourne
Brisbane has already felt the effects of unit oversupply and although there remains a large number of units to be completed, the construction cycle peaked almost two years ago and the city is already starting to see some moderate rises in values and rental rates.
Considering that dwelling values have generally trended lower over the past twelve months, buyer’s who have purchased a unit ‘off the plan’ may find the unit value at the time of settlement is lower than what they may have expected at the time of signing the contract.
In some cases, the settlement value may be lower than the contract price, implying buyers may need to top up their deposit in order to meet their lenders loan to valuation requirements.
Note: The settlement risk data estimates the number of new units expected to be completed over the next 12 and 24 months and is collected from the associated industries and based on estimated project completion dates. It notes that some of these projects may be delayed, deferred or cancelled entirely, however, the report provides an indication of likely new apartment supply.
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