There has been a strong supply response for a number of the Australian housing sub-markets in response to low interest rates and rising prices.
Indeed, rolling annual building approvals are now at their highest level on record, and the residential construction industry is now likely to be approaching its full capacity.
The above chart shows that this cycle has been very much been about an increase in attached dwelling approvals and construction, rather than detached housing.
Much more detail on this phenomenon can be found here.
Where might we see oversupply?
In Sydney, around the inner south we are already seeing new supply aplenty.
If you want to see the kind of thing I am talking about, check out a few of my photos here.
Brisbane too has a number of sectors of the market which are prone to overbuilding (I took some more photos here, for example).
Back in the harbour city there have also been than 7,000 approvals in Parramatta and Auburn combined in the year to April 2015, so that particular sector of the market is also likely to be flooded with new apartment buildings in due course.CoreLogic-RP Data's excellent research also suggests that both Hornsby and the Hills District are likely to see more units constructed than the underlying demand for them.