Colliers International have just released the Canberra Apartments Research and Forecast Report for the second half of 2012. It does not appear to be available online yet (I’ll update when it is) but the Canberra Times has jumped all over it with an interactive map of the status of current and future apartment developments in the Inner North and Inner South.
I’ve summarised the data from the Canberra Times interactive map in the two tables below. The first table shows the situation for Inner South apartment developments with the two columns on the far right showing the cumulative percentage of apartments sold in each development according to Colliers International first half or second half of 2012 reports. The results show that apartments are still selling, albeit slowly, and it seems hard to sell those last few remaining units.
Results for the Inner North developments below show a similar story. I’m not sure what happened to the Arte development to go from 100% sold earlier in the year to only 84% sold recently.
Interestingly, the recently completed ‘Lakefront’ development at 11 Trevillian Quay in Kingston was missing from the Canberra Times analysis although Colliers recorded 7 still for sale from the 154 apartment complex in their first half 2012 report. However, there are at least 12 for sale listings for ‘Lakefront’ apartments on allhomes indicating that some of the sales either fell through or buyers/investors are bailing. There are also over 50 rental listings for apartments in the ‘Lakefront’ development on allhomes, making up over one-third of all of Kingston’s rental listings, plus they flooded on last week indicating that the apartments have just been finished. To give the development credit, they do appear to be renting fairly quickly with a number either rented or under application indicating that people do want to live in the apartments by the lake.
The Canberra Times presented differing opinions of Canberra’s apartment situation. According to Paul Powderley from Colliers International, Canberra apartment developments are “at crossroads now [and] it’s not dire straits yet, but it has the potential to get bad.” Ariel Pollard from Colliers stated that some developments “will be under threat of not going ahead if presales for these projects are not met and further developments are taken to market.” Independent Property Group’s Sales and Marketing Director John Minns was not so negative arguing that some approved developments “will not be built for some time.” Similarly, REIACT’s Craig Bright thinks that “it can turn around pretty quickly.”
But can it turn around quickly? Earlier in the year, Colliers International Canberra Apartments Research and Forecast Report for the first half of 2012 noted that “31 projects comprising 3,959 apartments are expected to complete over the 2013 calendar year. These 31 developments represent 56% of the future supply in the Canberra region.” Most of these developments (15) are located in the Inner North and Inner South, while the other 17 are in outer lying districts. This is approximately double the 2,000 apartments across eight inner Canberra and seven outer Canberra projects that are scheduled for completion in 2012.
But none of this is new news. Recently I showed how units and apartments were largely contributing to the growth in Canberra’s stock on market and several new developments were not selling quickly enough. Similarly, earlier in the year it was becoming clear that an oversupply of Canberra apartments was coming due to an increase in development construction and approvals.
While some of the scheduled apartment developments may be delayed or even shelved, there is still set to be a flood of new apartments in the coming years. This additional supply to the already increasing supply of apartments looks set to have a downwards impact on both rental and sale prices of units and apartments in the ACT.