Today we note once again that the oversupply in Victoria is in the news.
Thousands of off-the-plan apartment buyers could face losses as a glut forces many Melbourne projects into limbo.
Two major property players have broken industry ranks to warn buyers about an oversupply of poorly located apartments in the development pipeline aimed at property investors.
Rob Pradolin, general manager of developer Australand, which has $400 million in projects under way in Victoria, predicted that 30 to 40 per cent of apartment projects currently advertised for Melbourne would not go ahead.
All those people who have paid deposits are locked in and can't pull their money out until the sunset clause in the contract expires in three, four and sometimes five years' time, he said.
We are not sure that these people with "locked up" deposits are the only ones who are trapped. We think the entire market is in trouble. Something very strange has been going on in Victoria, something that sets it apart from all the other states. We will leave it to the ABS stats to show you what it is.
Firstly Dwelling Unit approvals by state.
And now the money for those approval.
and now the break down by type for Victoria.
Exactly why Victorians have suddenly decided that the last 18 months was a great time to build units and townhouses, and to a smaller extend houses is beyond us. But it certainly is very obvious in the statistics that is what they are doing. While all the other states are have either steady or falling new dwelling figures Victoria is shooting for the moon.
But the story is much worse, as we noted back in October the student enrolment numbers for next year are going to fall dramatically. This is going to have large upfront effect on demand for housing, particularly units, and a large secondary effect on the economy.
It looks like Victoria is going for bust.
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