Supply v Demand

Much is written about population growth in the real estate space, with most making comments about how it adds to underlying housing demand.

In equal fashion a lot is written about new housing supply, with many quick to jump on either the ‘under supplied’ or ‘oversupplied’ bandwagon.

Most of the time these discussions are in isolation from each other and it is rare to see them interwoven. But they should be because it’s the relationship between supply and demand that matters most.

I have included four charts that outline the state of play for new housing supply and underlying demand (that is the need to build new dwellings) for the four major capitals.

In summary these show that Sydney is oversupplied; Melbourne is more or less balanced; Brisbane’s recent oversupply looks to be short lived and Perth is almost through its market correction.

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