Amid fears of an apartment supply glut in Australia in the coming years, Asian Pacific Group chief executive Will Deague begs to differ.
"Based on what I have seen, with the number of cranes, Melbourne will only be able to complete about 4,500 apartments a year," he said. "It's a bugbear for me when I see the media writing about an oversupply. Melbourne has an undersupply of apartments, not an oversupply."
Though building approvals and pre-sales are high, Deague believes that the actual apartments being built are way lower. According to his calculations, 4,500 apartments a year will be built in Melbourne, and that is not enough to house 4,000 new people arriving in the city each week.
"If you look at some of the resales, you are going to have the odd situation where people are going to panic," said Jonathan Deague, managing director of Asian Pacific Group.
Last March, the residential market was sent into a panic after figures showed as much as a 30 per cent decline in apartment resale prices in the Melbourne CBD. But the younger Deague pointed out that "Property is not a one-year investment," so there is bound to be some "blips" in the property investment cycle and that in general, the Melbourne apartments are on the "right side of the block."
Indeed, the Asian Pacific Group is not slowing down development. It is currently developing Whitehorse Towers apartments in Melbourne's Box Hill and co-developing Collins House apartments in the CBD. It also has ongoing projects in Queensland and Brisbane.
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