Oversupply concerns exaggerated, says iBuyNew CEO
Areas such as Zetland and Waterloo in Sydney, and the South East Queensland region are showing no signs of slowing down, says iBuyNew CEO, Mark Mendel.
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Concerns about the over-supply of new apartments in Australia have been exaggerated as many of the proposed developments will never eventuate, says iBuyNew CEO, Mark Mendel.
Mendel said many developers with approvals for apartment developments won’t complete the project because they are unable to obtain finance.
“While there is a lot of discussion about banks toughening their lending policies for buyers, they are even tougher on developers,” Mendel said.
“Developers with no track record are getting a blanket ‘no’ from lenders across the board, while those with a limited track record are also finding it extremely tough,” he said.
Mendel, whose company iBuyNew sells off-the-plan apartments and townhouses, said it is too simple to say there is an over-supply of apartment complexes nationwide.
“You really need to look at the specifics of each state, region and suburb,” he said.
“There are definitely pockets of Brisbane, Melbourne and Sydney that may experience an oversupply of apartments.
“But if you look at Zetland/Waterloo in Sydney’s inner south where thousands of new apartments have been built over the last five years, everyone expected an oversupply but capital growth has still been more than 10% in the last 12 months.”
Mendel said South East Queensland was also going through a huge transformation.
“This is becoming an international region with infrastructure developments such as the new $2 billion casino in Brisbane, as well as the Gold Coast hosting the Commonwealth Games in 2018,” he said.
“These elements will change the way the world sees Brisbane and South East Queensland in coming years.”
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