Housing Prices To Go Down By 2018 As A Result Of Oversupply

BIS Shrapnel, a leading economic and property forecaster, indicated a strong growth in the number of housing projects throughout Australia by 2018. It expects this growth to lead to a considerable decline in house prices.

In a report it released on Monday, the forecaster reveals the years 2014-2015 has witnessed a considerable level of activity in this area of development. As a result, the country is expected to see an overflow of housing projects by 2018.

Australia has so long been seeing a shortage in the housing sector. The constant shortage of houses had led prices to rise extravagantly over the years - prices that are more expensive than any other developed nation. But statistics reveal that around 200,000 new housing projects got underway this year to March, and this boom would wipe off the shortage within just a few years.

"The record breaking home building boom that we've been seeing, we see it peaking in 2015 and some key markets are set to move into oversupply," said Kim Hawtrey, associate director of BIS Sharpnel. Dr. Hawtrey further added that the outlook is not the same for all the builders and construction workers throughout Australia.

He predicted that Melbourne, Perth and Adelaide will all see declines in building activity over the next three years. "On the other hand, New South Wales is still going to grow and Queensland, Brisbane, is going to do pretty well too," Dr. Hawtrey said.

Melbourne is already facing an oversupply of dwellings as the developers continue to build more houses, Dr. Hawtrey further adds. The activities are very likely to have negative implications on the housing sector of this part of the country. Since there is an oversupply of housing projects in Melbourne, he said there is a high possibility of easing of prices, but it is considered as a correction rather than a crash.

Contact the writer at debleenasarkar26@gmail.com.