The supply response appears to be working.
There are a few more regions around Australia as detailed here previously where unit supply is ramping up apace, but these are two premier examples.
As a general rule when a development says that 1 bedroom apartments "start from" $359,000 and 2 bedroom apartments "start from" $459,000 (if my eyesight is any good, that is), typically this will refer to the most inferior apartments in the block and possibly those without parking spaces...although I can't say for sure in this instance.
Much of the new apartment stock will likely be sold offshore to Asian investors, of course, but these prices should act as a guideline for investors who are potentially looking to buy established 2 bedroom apartments in the vicinity.
If you are investing in a house with a high land value content this is one thing - but if you are looking at an apartment then the above figures should offer you a very strict set of guidelines as to how much you should be prepared to pay.
Construction of expensive new apartments can underpin prices for a time. However, particularly in an area where there is an elevated of new supply investors need to source apartments which you can always let out easily.
This becomes more challenging when there is a higher volume of new supply around. Look for spacious apartments in smaller or boutique blocks, ideally with a view and some outdoor space, such as a balcony. And don't overpay.
Below is a photo of the old Myer Coorparoo complex, for which "DA" has been approved for a new retail, commercial and residential development. This will include some 442 new apartments across 18 levels.
And coming up...
I expect to see that a slowing in net long term migration which has long been evident in the Overseas Arrivals and Departures data will lead total Australian population growth to have slowed materially through 2014.
I also expect to see population growth slowing significantly in the mining states, while Sydneysiders and whatever people from Melbourne are called these days (Melbournites? Melburnians? Mexicans?) opt to stay put, placing massive pressure on infrastructure and housing markets in those two cities.
In short, the strongest population growth in 2014 will be seen in the two most populous cities due to a structural shift in interstate migration patterns.
The Q2 2014 Demographics release has already showed that net interstate migration from New South Wales is at the lowest level on record across decades of data, which migration into the sunshine state of Queensland has slowed.
Even within Queensland we are seeing a shift of population away from some mining regions but employment growth in the capital city of Brisbane remaining relatively robust.
Also due out from the on Friday and Q4 2014 Finance and Wealth data, which is effectively a subset of the Australian National Accounts.