ASX-listed housing developer AVJennings has hit out at government planning regulations that threaten an apartment glut, despite the group tipping strength in the broader housing market to persist for the foreseeable future.
In comments made to investors at the company’s annual general meeting, chief executive Peter Summers said conditions for the coming year would be similar to those that have encouraged strong growth in east coast prices over the past 12 months.
A core reason for the confidence in the market’s strength is continued supply constraints for houses as apartments represent the bulk of supply growth.
“We see a very positive outlook in relation to the traditional housing markets,” he said.
“So much media attention has been on the recent high levels of apartment construction. However, this has done little to meet the needs of traditional housing requirements and overall, there remains an undersupply in the traditional housing markets.”
Beyond an undersupply of properties sought by Australian families, Mr Summers also saw favourable economic conditions with low interest rates, a stable labour market and population growth aiding the market.
“More specifically, we see ongoing strength in New South Wales, Queensland and Victoria,” he added.
The comments come amid rising expectations inner-city markets in Brisbane, Sydney and Melbourne could be home to an apartment glut from next year, following unprecedented development growth that has yet to show major signs of receding.
Mr Summers said the situation had been developed in the policy rooms of the public’s representatives.
“A small part of this has been a trend to higher levels of apartment living than in the past. But this is only a small aspect, as Australians have not suddenly in the last few years decided they want to live differently,” he said.
“The higher relative level of apartment construction has mainly been because the planning barriers to development of many apartment projects are lower compared to traditional areas of housing.”
He urged governments to stop looking at property as a tool for revenue raising and to also boost infrastructure spending, as affordability issues continue to undermine the chances of young Australians joining the property ladder.