Brisbane's apartment market is self-regulating away from oversupply, with 32 per cent of future apartment projects either now on hold or unlikely to go ahead, according to a new report from Place Advisory.
Lachlan Walker, director of Place Advisory and Place Projects, told SCHWARTZWILLIAMS the deferrals are a positive for the industry.
"Potential oversupply will be removed in the future," he said.
Walker said tighter bank lending and weaker sales were the reasons for the deferrals.
The report also predicts a trend towards larger apartments, forecasting that 11 per cent of Brisbane apartments will have three bedrooms by 2019, compared with only 5 percent in 2017.
Source: Place Advisory, using BCI Australia data.
Three-bedroom apartments "could get to 10 per cent in the next year which is a good thing for the projects overall," said Walker.
A higher percentage of three-bedroom apartments "generates higher levels of owner occupiers and higher quality maintenance and projects overall," said Walker.
Craig James, chief economist of CommSec, said January data from the Australian Bureau of Statistics shows "home builders, lenders, investors and developers are all being more cautious about new developments", adding it is "good news" for the industry.
New dwelling approvals rose by 1.8 per cent in January but were down 12 per cent on the year.
January dwelling approvals were down 11.9 per in Queensland. (Approvals rose 24.0 per cent in NSW).
The Housing Industry Association expects dwelling starts to fall 6.5 per cent in the 2016-17 year, and fall a further 15.6 per cent in 2017-18.
Read Place Advisory's report, Brisbane's Future Apartment Pipeline, here.
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