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Bad news! Sydney's homebuyers are being hit again!

Source: yeeyi.com
[Economic News]     17 Jan 2020
The dwindling construction activity is bound to lead to another housing shortage, which will make it more difficult for first-timers to enter the market. Figures released on Wednesday by Australia's Bureau of Statistics (ABS) showed the number of new house starts in the new state fell to its lowest level in five years in the third quarter last year. New start - ups fell 34% compared with a year ea...

The dwindling construction activity is bound to lead to another housing shortage, which will make it more difficult for first-timers to enter the market.

Figures released on Wednesday by Australia`s Bureau of Statistics (ABS) showed the number of new house starts in the new state fell to its lowest level in five years in the third quarter last year.

New start - ups fell 34% compared with a year earlier, with new start - ups down 43.1% and independents down 26%.

Further declines in realestate market activity, combined with strong population growth and demand for new housing, could trigger another housing shortage in 18 to 24 months, with buyers facing higher pressure to bid, realestate experts warn.

Bad news! Sydney's homebuyers are being hit again!

The decline will also prolong the time when potential buyers will actually buy a home.

Cameron Kusher, research manager at REA Group Economic, said:`Many new development projects have been completed, but many started years ago.

He added that the recent decline in new projects indicated that "things are beginning to turn" and that new development projects would become more scarce in the coming years.

Bad news! Sydney's homebuyers are being hit again!

"Developers have been pushing back and they`re having a harder time getting project financing... If this continues, there will be shortages in realestate," mr. cuschel said."

Shane Garrett, the chief economist at MasterBuilders, said the sector where the biggest fall in the number of starts was in high-density housing, so it also showed concerns might be raised about some "reputational issues about apartments."

Residents were forced to evacuate apartment blocks from time to time last year due to dangerous building defects, including Opal Tower in the Olympic Park and Mascot Towers in Sydney`s south.

Bad news! Sydney's homebuyers are being hit again!

Geordan murray, the housing industry association, said the fall in construction activity in the third quarter reflected the weakness of the housing market in early 2019.

At the time, demand for new homes was low, as banks remained tightly constrained in their lending financing - especially for investors, most of the buyers of new pre-sale properties were investors.

Pre-sale is often crucial to the launch of new properties, as pre-sale can make it easier for developers to finance projects.

Sydney prices are expected to rise another 10% this year, according to SQM Research.

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