Australia’s east coast has a ballooning oversupply of houses
By Wolf Richter, Wolf Street From Business Insider
Investment in the Australian housing sector has become a frantic activity, and prices have soared. This has been accompanied by a construction boom, particularly of large multi-family developments. But that construction boom is now creating a ballooning oversupply “up and down the East Coast of Australia,” warns Roger Montgomery, Chief Investment Officer of Montgomery Investment Management in Australia, in the short video below, “Property Implosion?”
In Brisbane, for example, vacancy rates have doubled, and it’s going to get much, much worse. Prices and rents will get hit as developers try to unload their apartments (condos) and as property investors will sit on vacant units.
The construction industry is already responding to the oversupply: Project approvals are plunging, which means that down the road, construction activity will be plunging. Alas, 12% of all jobs in Australia are in construction, and “some portion of that 12% will have to look for jobs elsewhere.”
(When he talks about Brisbane’s “CBD,” he means Central Business District).
Read the original article on Wolf Street. Copyright 2017. Follow Wolf Street on Twitter.
IMAGE: TripAdvisor
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