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CHANGES to property market fundamentals will temper any likelihood of a bubble caused by oversupply in the residential market, according to the Commonwealth Bank’s chief economist Michael Blythe.
Blythe said supply will be increasingly coming on-stream over the next couple of years and as a result, cool the housing market.
“But right at the start of the pipeline though we are starting to see some adjustments coming through,”
Speaking at the Australian Property Institute’s National Property Conference on the Gold Coast, Blythe said there is a record amount of residential development land for sale right now.
“So that new supply will be coming through, but we’re not adding to it, so it will be a short-term phenomena if you like. And that land sale that is now coming through means there is a chance to redesignate that land and the property areas we may see some of that coming through are I think are in, again, education, tourism and aged care is the other area we’d be looking at,” he added.
Blythe said the major residential construction currently underway is “great” for generating economic activity and jobs.
Blythe said foreign investors like the returns that are on offer in Australia, with the increasing amount foreign investment going not only into our residential market, but also spilling over into the commercial property sector.
Read and watch more special coverage of the Australian Property Institute’s 2016 National Conference:
- Focus on fundamentals not financial wizardry
- Future of real estate offers challenges and opportunities
- Residential oversupplied but no property bubble
- Recent changes to API a positive move
- Valuation industry encouraged to cap downside risk
- Disruption in property industry here to stay
- DoD land contamination to test property prices
- Value uplift drives repurposing of industrial land
Australian Property Journal
