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Fears surrounding the oversupply of new apartments in Australia have become increasingly “exaggerated”, according to the chief executive of one online property agency.
iBuyNew CEO Mark Mendel said talk of an apartment oversupply is “over stated” since a number of developments that have been proposed will “never eventuate” due to developers being unable to obtain finance.
“While there is a lot of discussion about banks toughening their lending policies for buyers, they are even tougher on developers,” he said.
“Developers with no track record are getting a blanket ‘no’ from lenders across the board, while those with a limited track record are also finding it extremely tough.”
Mr Mendel said while some areas may experience an oversupply of apartments, it is unrealistic to say this is a nationwide issue.
“You really need to look at the specifics of each state, region and suburb,” he said.
“There are definitely pockets of Brisbane, Melbourne and Sydney that may experience an oversupply of apartments.
“But if you look at Zetland/Waterloo in Sydney’s inner south where thousands of new apartments have been built over the last five years, everyone expected an oversupply but capital growth has still been more than 10 per cent in the last 12 months.”
Mr Mendel said south-east Queensland in particular was going through a massive transformation.
“This is becoming an international region with infrastructure developments such as the new $2 billion casino in Brisbane as well as the Gold Coast hosting the Commonwealth Games in 2018,” he said.
“These elements will change the way the world sees Brisbane and south-east Queensland in coming years.”
[Related: John Howard gives agents a history lesson]
ABOUT THE AUTHOR
Emma Ryan
Emma Ryan is the deputy head of editorial at Momentum Media.
Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.
Email Emma on: Emma.Ryan@momentummedia.
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