Based on most recent apartment market report the sentiment and fear surrounding Labor’s proposed negative gearing changes are doing more harm to the already soft apartment market than the actual eventual changes. This comes as new apartment completions nationally will drop by almost one-third this year from 23,200 in the last calendar year to 16,000. The key concern is that a strong negative political campaign in this year’s upcoming federal election in an already faltering property market could do further significant harm.
In the long term though the report indicates that there may be stabilisation in the property market overall in the latter half of this year once the royal commission and election talk dies down. There is even the further risk that apartment supply might fall too sharply as demand could increase again due to strong population growth forecasts.
Overall the report indicates that Melbourne is performing much better than Sydney in terms of both apartment completions and the overall property market. There is also the interesting trend emerging where developers are repurposing traditional apartment development sites for commercial developments.