Record supply figures in top markets point to easing affordability

By Sasha Karen 17 August 2018 | 1 minute read

With the property market bubbling down to supply and demand, one industry expert has stated that demand is being met with ample supply, and is helping push down property prices.

houses lots in row

According to new data from the Housing Industry Association (HIA), the stalling of rental price inflation over the June quarter is the most important indicator of easing housing affordability, as Tim Reardon, principal economist at the HIA said it shows demand in the most popular states of Sydney and Melbourne is being met with record volumes of new housing.

“The fall in house prices will dampen demand for new housing over the next 12 months. Add to this, the proliferation of punitive taxes on investors in the housing market, disincentives to overseas buyers and tighter oversight of mortgage lending for home purchases and the environment for residential building is facing significant challenges,” Mr Reardon said.

“For these reasons we expect that the housing market will cool over the next couple of years, but the down-cycle that has emerged, in certain segments of the market and locations, will be moderate.”

He added that detached housing starts in the March quarter this year was the strongest result in 18 years, and that similar trends should follow for the June quarter.

“On this basis, it now looks like we will round out the 2017–18 year with over 120,000 detached house starts. This would be the strongest four-quarter performance for the sector since the mid-1990s,” Mr Reardon said.

Further affordability improvements and regulatory measures were described by Mr Reardon as most likely to affect the apartment markets in metropolitan areas.

“In the March 2018 quarter Victoria posted a record high of 12,000 multi-unit starts, which accounted for nearly half of the 26,300 units that were commenced across the entire country. The slowdown in apartments is also likely to be focused on metropolitan Melbourne and Sydney.”

However, this trend is not likely to be applicable across the rest of the country, with strong market movements in major regional centres offsetting some of the decline across metropolitan Australia.

Further, Queensland, Tasmania and South Australia are following different trends, while Western Australia is not in a state of decline anymore.



Affordability refers to a product or service that is inexpensive and accessible for people with limited means.

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Record supply figures in top markets point to easing affordability
house affordability, supply figures, house market, property investment
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