High-density approvals have more than doubled in Sydney since 2012-2013, says a new report.
According to BIS Oxford Economics’ Apartments in Sydney Suburbs Market Brief, apartment approvals have increased from 13,500 approvals in 2012/13 to 30,100 approvals in 2016/17.
Annual completions have also doubled from 23,100 starts in 2012/13 to an estimated 47,200 starts in 2016/17. This has seen the underlying dwelling deficiency slowly erode since 2014/15. Over 2017/18, BIS Oxford Economics forecasts completions to remain strong while underlying demand is expected to ease.
While inner Sydney has traditionally attracted the greatest amount of high-density activity, the report indicates the city’s middle ring has now begun to account for a greater share of high-density dwelling approvals.
In terms of apartment occupiers, two-bedroom apartments account for the majority of the Sydney apartment stock (56 percent of occupied apartments at the 2016 Census). Studios and one-bedroom apartments account for another 29 percent of Sydney’s occupied apartments, with the remaining 15 percent containing three or more bedrooms.
BIS Oxford Economics says that as the market picked up, median price growth for units averaged 9.1 percent per annum between 2012 and 2017. Indicative unit yields have now fallen below their previous lows of 2005. According to the report, this would suggest little potential for further unit price growth (and eventually the possibility of price declines), as occurred during the mid-2000s.