Vic maintains Property Undersupply

The report below published last Thursday in the AFR is good news for Cedar Woods in that Victoria will likely be in +ve net migration despite Covid-19 restricting migration from overseas in the short term.

Cedar Woods has a number of large high profile property development projects in Victoria. Williams Landing being the most well known.

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Victoria to keep housing undersupply despite migration drop

Michael BlebySenior reporter
Jun 18, 2020 – 4.19pm


Victoria is the only state that will maintain an undersupply of housing despite a COVID-19-triggered slump in migration because the country's fastest-growing state has enough latent demand that will not be erased in the slowdown, consultancy m3property says.
The federal government's forecast 85 per cent decline in immigration over the two years from 2019 would plunge all mainland states into a situation of housing oversupply, but Victoria would buck the trend with an undersupply of 7391 dwellings in 2021, the consultancy says in a report

No oversupply: Victoria will buck the surplus housing imbalance facing other states.  Erin Jonasson
"We expect Victoria to continue to be under supplied over the next three years with the demand-supply gap likely to start reducing by mid-2021 before widening again from early 2022 when we begin to see population growth returning to pre COVID -19 levels," said Jennifer Williams, m3property's national director research.
The Implications of COVID-19 on Residential Market June 2020 report, which assumes no second wave coronavirus infection, clearly shows the link between migration – both domestic and international – driving demand for new housing.
Sydney and Melbourne, the two cities with property economies built around the expectation of large new numbers of residents, will be most hit by the slowdown from the country's closed international and domestic borders.

While overseas migration is a large part of states' growth, it is not the only part. While new migrants accounted for 75,600 of Victoria's 122,200 new residents last calendar year, the state also benefited from net interstate migration of 10,649.

NSW, by contrast, relied proportionately more on foreign migrants, who comprised 70,500 of its 90,900 net new residents even as it lost 22,400 people to other states. The most-populous state will face an oversupply of nearly 29,000 homes next year, and demand will only overtake supply again in 2023, the report says.
Queensland is the state with the largest net interstate migration, having gained a further 22,900 people last year – most of them from NSW – in addition to the 27,100 net people it gained from overseas.
The Sunshine State is also facing a likely oversupply of 14,263 homes next year and will only return to balance in 2023, the report says.


WA with a surplus of 21,840, will also only only return to supply-demand balance in 2023, while SA, with a lesser oversupply of 1317 dwellings, would return to balance this financial year, m3property said.
Despite Victoria's persistent undersupply, the state was still subject to other dynamics that would dampen its property market, Ms Williams said.
"It still being impacted by the [fall in] confidence, the shutdowns and the lack of household formation," she said.