[URBAN NOTE] "Skyscraper Boom in Second-Largest Australian City Flags Glut"

[rfmcdonald]

Nichola Saminather's Bloomberg article on Melbourne highlights for me as a Torontonian ways in which Toronto's real estate boom is being paralleled elsewhere. What happens to Toronto and Melbourne when the bubble bursts?

Australia’s second-largest city is seeing its skyline being transformed at the fastest pace ever by Asian developers building residential towers. Now there are concerns too many are going up.

Companies including Hong Kong-based Far East Consortium International Ltd. (35), Beijing-based Sino-Ocean Land Holdings Ltd. (3377) and Singapore’s Aspial Corp. (ASP) have flocked to build high-rises in Melbourne as lifestyles change and Chinese demand climbs. Twenty-three buildings taller than 200 meters (656 feet) are being planned or built, the most on record, according to Urban Melbourne, a website that tracks developments in the city.

“The level of building is unprecedented,” said Cameron Kusher, Brisbane-based senior research analyst at property information provider RP Data Pty. “The supply has been sufficient over recent years, and that could turn very quickly into an oversupply.”

Overseas developers are responding to a shift away from the great Australian dream of a suburban life centered around backyards and swimming pools. They’re also reacting to ever-increasing demand for new, centrally located apartments from Chinese buyers seeking to escape their own faltering housing market and improve their quality of life.

Melbourne was among the 10 most unaffordable housing markets in the latest report by consultancy Demographia released in January, which compares prices across nine countries.

About 91,000 apartments in almost 530 projects are in planning or construction across all of Melbourne, according to Urban Melbourne data. Approvals for dwellings excluding houses jumped 66 percent in August from a year earlier in the greater Melbourne area, data from the statistics bureau showed.