Development binge a risk for investors
Land-buying by developers of medium-density Sydney housing estates has trebled since 1999 leading to concerns about oversupply which in turn threatens investors in apartment markets. CRM Research says the fear of overbuilding has become a reality. Vacancy rates will go up and rents for one-to-two bedroom units will go down. The pursuit of land is not confined to the CBD but spread to prime land throughout the suburbs. Residential developers Mirvac and Meriton have confirmed they are actively pursuing sites. Over 2001-2003, there have been $2.8 billion in land sales each year compared with less than $2 billion for the two previous years together.