Here come the cranes: Sydney’s apartment market is reaching new heights of construction activity in Q1 2018

Apartment approvals have seen a decrease since the last quarter with only 2,247 new approvals in Q1 2018, compared to 3, 468 in Q4 2017. This is a national trend with Melbourne, Perth, Inner Brisbane and the Gold Coast also recording a fall in approvals. As reported last quarter, Sydney apartment developers are still in the delivery phase, selling and settling their projects across the region. Three projects sold out this quarter and a further 11 surveyed projects over 90% sold.

Parramatta recorded the largest future supply with over 11,000 apartments in the pipeline including 2,048 apartments in the application phase and a further 4,555 with development approval.

The majority of future supply are two-bedroom apartments, the highest ratio found in Sydney’s North West Middle Ring (60%) and Parramatta (68%).

Cranes have sprung up around Sydney with 29 projects starting construction in Q1 2018, contributing to a total of 123 actively selling projects under construction, expected to deliver 24,282 apartments.

32 apartment developments were completed in the March 2018 quarter, delivering 5,029 apartments to the market.

Our Sydney Apartment Essentials Report found:

• 116 sales, from a sample of 26 surveys, were recorded in the March 2018 quarter (16% sample of the market). This was one of our lowest sample sizes in the history of this study, indicating that some developers are not wanting to share their position in a slowing sales environment.
• The majority of sales were recorded in the Inner South precinct (59%), followed by the Inner West precinct (22%) and Parramatta (12%). Erskineville recorded 66% of sales within the Inner South precinct, accounting for 39% of the total surveyed region
• The weighted average sales price for the March 2018 quarter was $1,099,569, in line with the December 2017 quarter ($1,110,463)
• Two-bedroom, two-bathroom apartments continued to be the most popular product type, making up 45% of total sales. One-bedroom apartments without a car park accounted for 28% of total transactions
• Local state investor sales led this quarter, accounting for 43% of sales, compared to 25% in the last quarter. Owner-occupier sales dropped from 51% in Q4 2017 to 35% in Q1 2018
• Six new apartment projects launched this quarter, equating to 2,177 apartments