Invest
Oversupply predicted to fuel 20% property declines
Sydney and Melbourne could experience a drop of up to 20 per cent in property prices in some areas as early as next year, given the supply of apartments coming on stream, an Australian economist has predicted.
Oversupply predicted to fuel 20% property declines
Sydney and Melbourne could experience a drop of up to 20 per cent in property prices in some areas as early as next year, given the supply of apartments coming on stream, an Australian economist has predicted.
AMP chief economist Shane Oliver says prices in Australia’s hottest property markets are likely headed for citywide falls.
“My base case would be at some point in the next couple of years, prices will fall 5 to 10 per cent in Sydney and Melbourne,” Mr Oliver told Nest Egg.
“It probably requires a turn-up in the RBA’s interest rate cycle. I don’t think the banks are enough to do that on their own.”
However, with a steady supply of apartments still coming on stream in specific areas across the two cities, the price pain should be more acute in some suburbs than others.
Mr Oliver said apartment-saturated suburbs could see declines of up to 20 per cent.
“I think sharp falls of 15 to 20 per cent could be more constrained to suburbs with lots of cranes, and more constrained to apartments as opposed to houses. In Melbourne, that apartment supply seems to be more concentrated to the inner city, whereas in Sydney it’s in those satellite centres like Chatswood and Parramatta,” he said.
“But if you're looking at standalone houses in the eastern suburbs of Sydney or the most of the suburbs of Melbourne, or out at Campbelltown and the Hills district, you’re probably looking at price declines, when they start to kick in at the start of next year, contained around 5 per cent.”
While Melbourne remains more at risk given its burgeoning apartment oversupply, those price declines could be followed by stabilisation if both cities act on housing affordability, Mr Oliver said.
“If state governments are serious about improving the affordability issue, and particularly expanding supply on a fundamental basis, that should help keep house prices down in the years ahead which should in turn gradually help improve affordability.”
RELATED ARTICLES
Property
Multigenerational living is moving mainstream: how agents, developers and lenders can monetise the shift
Australia’s quiet housing revolution is no longer a niche lifestyle choice; it’s a structural shift in demand that will reward property businesses prepared to redesign product, pricing and ...Read more
Property
Prestige property, precision choice: a case study in selecting the right agent when millions are at stake
In Australia’s top-tier housing market, the wrong agent choice can quietly erase six figures from a sale. Privacy protocols, discreet buyer networks and data-savvy marketing have become the new ...Read more
Property
From ‘ugly’ to alpha: Turning outdated Australian homes into high‑yield assets
In a tight listings market, outdated properties aren’t dead weight—they’re mispriced optionality. Agencies and vendors that industrialise light‑touch refurbishment, behavioural marketing and ...Read more
Property
The 2026 Investor Playbook: Rental Tailwinds, City Divergence and the Tech-Led Operations Advantage
Rental income looks set to do the heavy lifting for investors in 2026, but not every capital city will move in lockstep. Industry veteran John McGrath tips a stronger rental year and a Melbourne ...Read more
Property
Prestige property, precision choice: Data, discretion and regulation now decide million‑dollar outcomes
In Australia’s prestige housing market, the selling agent is no longer a mere intermediary but a strategic supplier whose choices can shift outcomes by seven figures. The differentiators are no longer ...Read more
Property
The new battleground in housing: how first-home buyer policy is reshaping Australia’s entry-level market
Government-backed guarantees and stamp duty concessions have pushed fresh demand into the bottom of Australia’s price ladder, lifting values and compressing selling times in entry-level segmentsRead more
Property
Property 2026: Why measured moves will beat the market
In 2026, Australian property success will be won by investors who privilege resilience over velocity. The market is fragmenting by suburb and asset type, financing conditions remain tight, and ...Read more
Property
Entry-level property is winning: How first home buyer programs are reshaping demand, pricing power and strategy
Lower-priced homes are appreciating faster as government support channels demand into the entry tier. For developers, lenders and marketers, this is not a blip—it’s a structural reweighting of demand ...Read more
Property
Multigenerational living is moving mainstream: how agents, developers and lenders can monetise the shift
Australia’s quiet housing revolution is no longer a niche lifestyle choice; it’s a structural shift in demand that will reward property businesses prepared to redesign product, pricing and ...Read more
Property
Prestige property, precision choice: a case study in selecting the right agent when millions are at stake
In Australia’s top-tier housing market, the wrong agent choice can quietly erase six figures from a sale. Privacy protocols, discreet buyer networks and data-savvy marketing have become the new ...Read more
Property
From ‘ugly’ to alpha: Turning outdated Australian homes into high‑yield assets
In a tight listings market, outdated properties aren’t dead weight—they’re mispriced optionality. Agencies and vendors that industrialise light‑touch refurbishment, behavioural marketing and ...Read more
Property
The 2026 Investor Playbook: Rental Tailwinds, City Divergence and the Tech-Led Operations Advantage
Rental income looks set to do the heavy lifting for investors in 2026, but not every capital city will move in lockstep. Industry veteran John McGrath tips a stronger rental year and a Melbourne ...Read more
Property
Prestige property, precision choice: Data, discretion and regulation now decide million‑dollar outcomes
In Australia’s prestige housing market, the selling agent is no longer a mere intermediary but a strategic supplier whose choices can shift outcomes by seven figures. The differentiators are no longer ...Read more
Property
The new battleground in housing: how first-home buyer policy is reshaping Australia’s entry-level market
Government-backed guarantees and stamp duty concessions have pushed fresh demand into the bottom of Australia’s price ladder, lifting values and compressing selling times in entry-level segmentsRead more
Property
Property 2026: Why measured moves will beat the market
In 2026, Australian property success will be won by investors who privilege resilience over velocity. The market is fragmenting by suburb and asset type, financing conditions remain tight, and ...Read more
Property
Entry-level property is winning: How first home buyer programs are reshaping demand, pricing power and strategy
Lower-priced homes are appreciating faster as government support channels demand into the entry tier. For developers, lenders and marketers, this is not a blip—it’s a structural reweighting of demand ...Read more
