Increasing affordability pressures are continuing to drive the off-the-plan apartment boom in Sydney, with an increasing number of new approvals located outside of the inner city.
New apartment commencements reached 19,450 during 2014-15, according to BIS Shrapnel’s latest Apartments in Sydney Suburbs Market Brief – an increase of over 10,000 from the figure recorded just a few years ago.
There were 8,300 commencements for apartments four storeys or more in 2010-11, when 37 per cent of total apartment building approvals were in middle-ring Sydney suburbs.
BIS Shrapnel noted that middle-ring suburbs now account for 55 per cent of approvals, a sign that Sydney’s price growth is driving owner-occupiers and investors towards both apartments and the outer suburbs.
The brief also found that the market came close to approaching oversupply levels during 2014-15, with dwelling completions exceeding immediate buyer demand for the first time.
However, years of insufficient construction levels between 2006-07 and 2011-12 resulted in an “estimated deficiency of 42,300 dwellings at June 2015,” meaning
“It will take some time for the market to return to balance, and this should still support an elevated level of new dwelling activity” based on future demand modelling, BIS Shrapnel said.
[Related: Building approvals remain strong]