High-rise apartments at weakest in eight months

Building approvals of new high-rise apartments slipped to their lowest level in eight months in October, as falling home prices further dampened investors’ enthusiasm, prompting developers to hold off on new projects.

This was the weakest since February. It suggested investors’ wariness about the declining residential market was influencing the development market.

I don’t believe this is a collapse in the supply pipeline of residential apartments, but this could translate in to a shortage of new apartments in coming years to meet the demands of a growing population.

Reserve Bank of Australia figures last week showed investor loans grew at their slowest pace on record in November.  This might be appropriate for now but in the coming years might trigger another boom in prices if the population growth continues.

This is compounded by the a drop in investor interest which is triggered by price falls and the credit squeeze which might keep investors out of property in the long run.

I strongly believe the possibility of a supply crunch around the years 2022 and 2023 is quite high with rents and prices increasing again