BIS Shrapnel continues to forecast dwelling supply shortages and rising rents
Respected property researcher BIS Shrapnel is reported in the Bulletin Magazine of November 15 last year as stating that:
- "Tenancy vacancy rates have fallen to long-term lows. That's triggering the fastest rise in rents
for 15 years”
- "Sydney and Melbourne have almost run out of properties to rent and vacancy rates are half
the desired level”
- "Expect massive rental growth"
- "Expect Sydney new investment properties coming on stream over the next 18 months to two years will be disastrously low"
- "Expect rents to grow by 35% to 40% over the next three years"
- The level of new investment properties coming on stream over the next 18 months to two years
will be disastrously low"
- "And the level of new rental construction in Sydney over this time will be pathetic"
All this has come to pass. And it is continuing. The quotes below are from the recent BIS Shrapnel News Release of 22 October 2007.
For Australia as a whole:
- "Australia’s housing needs have risen to a new record high of 182,000 new dwellings per annum”
- "The expansion in housing needs is largely due to the new heights being registered for net
overseas migration”
- “BIS Shrapnel forecasts Australia’s population gain from net overseas migration will reach 185,000 persons in 2007/08 – the highest annual inflow on record”
- “The current rate of residential construction is substantially below underlying demand. There were 151,000 national dwelling commencements in 2006/07, and BIS Shrapnel forecasts a similar level of commencements for 2007/08 contributing to a greater deficiency of dwellings. The deficiency is forecast to reach about 100,000 dwellings by June 2008”
For NSW, the shortage is particularly acute:
- “Activity in NSW reached a near 50-year low in 2006/07, with only 29,300 housing starts. This rate of construction is substantially below the level of underlying demand, which BIS Shrapnel estimates at 49,400 dwellings”
- "The huge gap between supply and underlying demand in NSW is leading to a substantial increase in the dwelling stock deficiency, which is estimated to rise to 41,400 by June 2008“
For Queensland:
- “Dwelling construction has been below underlying demand for several years. As a result, Queensland has provided the earliest evidence of a tightening rental market. The residential rental index is in the midst of an established acceleration period, having shown average annual rental growth of 6% over the three years to June 2007 ”
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