I was not surprised to learn yesterday that the OECD remains concerned about Australia’s housing market, which has shown signs of over-heating, particularly in Sydney, although the OECD did note that there are “receding risks from the housing boom” (see the Brisbane Times report OECD warns Australian property prices facing ‘dramatic and destabilising’ demise). The OECD is right to recommend that:
“Close vigilance on housing-market developments is still required.”
In Queensland, a significant risk for the next couple of years comes from the large supply shock that is occurring from all the new apartment developments we are seeing, particularly in inner city Brisbane. Commencement data for 2015 suggest a big surge in completions in 2016 (see chart below).
I have previously posted on the possible implications for unit prices: