Are there too many apartments in Canberra?

14 February 2017

Almost anywhere you go in Canberra you will see cranes dotting the skyline, building the city’s next hulking apartment towers.

Thousands of units are appearing across Canberra; in Belconnen, Tuggeranong, Gungahlin and the inner-city.

One of the biggest drivers of that construction is developer Geocon — its managing director Nick Georgalis oversees 30 per cent of the city’s apartment market.

“The apartment market in Canberra at the moment is going through a huge boom,” he said.

“We usually have about 350 to 400 sales per annum, and in the past 12 months that’s increased to about 550.”

As the market runs hot, critics raise the spectre of oversupply.

But while economist Benjamin Phillips from the Australian National University said an oversupply was likely, it was not all doom and gloom.

“[It] takes a little bit of heat out of rents and perhaps a little downward pressure on prices,” he said.

“Housing affordability is an issue in Canberra, as it is right around the country, and some extra supply is probably a good thing.”

But Mr Georgalis disagreed with the characterisation of an oversupply, saying the benefits of adding extra apartment stock was clear.

“There’s been an underlying demand for apartments for the past couple of years in Canberra and a gross undersupply,” he said.

“Vacancy rates for rental properties sit under half a per cent … we’re seeing that now being taken up and being realised by the market.”

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