Melbourne is facing a massive oversupply of properties, in particular inner-city apartments, as population growth stagnates and buyer demands remain unfulfilled, a property analyst has said.
"Much of Victoria's potential pain lies in Melbourne's inner-city apartment boom, which has seen an unprecedented proportion of the state's new dwelling starts go to apartments," independent property analyst Michael Matusik told The Australian.
In what he described as a speculator-fuelled surge, Matusik said many of these apartments may be difficult to sell as two-thirds of Australians continued to prefer detached dwellings.
He added that population growth was not keeping up with the number of new housing starts in Victoria, South Australia, Tasmania and the Northern Territory. “Perth and Canberra are better positioned, with Queensland currently at equilibrium and NSW undersupplied."
The Real Estate Institute of Victoria (REIV) disputed this view.
“The National Housing Supply Council put the shortage of homes in Victoria in 2009 at 22,700,” REIV’s communication manager Robert Larocca told Real Estate Business today.
“House prices and rents rose more rapidly over the past five years than the five years before that because there were not enough homes built to keep up with demand,” he said.
“This failure to build enough homes, detached houses and apartments, lead to a reduction in affordability here in Melbourne over that time.”
“We eagerly await the next report from the National Housing Supply Council as it will provide independent data and analysis of the supply issue."