April 16, 2021
Melbourne Apartment Supply demand to balance in 2022
Share
- Last week we had some investors question if we were being too optimistic about the potential supply deficit of new apartments in Australia in the coming 2-3 years.
- There were questions regarding our exposure to Melbourne apartment developments which have seen the biggest demand “airgap” due to COVID-19 and net migration outflow (chart 1) which is causing pricing weakness.
- Our current portfolio only has exposure to one Melbourne CBD apartment development which is due to be refinanced on May 30, however we are actively pursuing several residual apartment loans.
- There is currently much more new development activation in Sydney, and this is reflected in new loans in due diligence.
- With a scarcity of new off-the-plan sales and apartment activation in Melbourne we outline the case below that existing stock will be well absorbed over the coming years.
