Sydney Market Insights Live Event Panel

NSW apartment supply is tightening. Here is what the latest development data tells us about demand, pricing and where the next opportunities sit

Market Insights EP 118: NSW New Apartments Development Supply and Demand Data & Insights | Mike Bird, Apartments.com.au; & Alex Stuart, Urbis

Sydney’s apartment market is entering a new phase. Completions are down, demand is rebounding and policies such as the 5 per cent deposit scheme are reshaping the buyer landscape. At the same time, developers are navigating feasibility pressure, transport-led growth corridors and emerging pockets of opportunity.

In this data-driven session, Mike Bird, CEO of Apartments.com.au, speaks with Alex Stuart, Director at Urbis, to unpack the latest findings from the Apartment Essentials platform and discuss how developers are using this data to inform strategy, sales and acquisitions across NSW.

Completions have fallen sharply and supply is not keeping up

Urbis tracks projects from DA lodgement through to pre sales, construction and completion. Stuart notes that completions peaked shortly after the last major boom in 2018, before declining through the soft market and the lockdown years.

The result is a chronic undersupply across Sydney that is now playing out in both pricing and absorption rates.

Looking ahead:

• Completions over the next 2 to 3 years are expected to stabilise
• But they remain well below what is needed to meet population growth
• The inner and middle rings are particularly constrained

This imbalance is driving confidence back into the market and contributing to stronger off-the-plan activity.

Owner occupiers dominate, but investors are returning

A decade ago, up to 40 per cent of new apartment sales went to foreign buyers. Today that figure has fallen to a small minority.

The current mix looks very different:

• 75 to 80 per cent of sales are now to owner occupiers
• Around 20 per cent to domestic investors
• Only a small proportion to foreign purchasers

There are early signs of renewed investor interest, supported by rental growth and the expectation of lower interest rates. Stuart describes this shift as one of the meaningful “green shoots” now visible in the data.

Off-the-plan sales are strengthening again

The Urbis survey tracks off-the-plan transactions as a portion of all available stock.

Key trends include:

• Between 2018 and 2020, average projects sold only around 5 per cent of available stock per quarter
• The market spiked temporarily in 2021 as low rates and positive sentiment lifted buyer confidence
• Since then, sales have stabilised at around 10 per cent per quarter
• The most recent quarter saw a noticeable increase

Stuart expects this growth to continue over the next two quarters, driven by interest rate expectations and government incentives.

Government policy is moving the needle, but gaps remain

The NSW Government’s 5 per cent deposit scheme has had a clear impact on absorption, supporting both metro and regional markets. Stuart notes that previous schemes were limited by low price caps, but thresholds are now more aligned with actual values in Sydney.

While policy is helping demand, the supply side remains challenging.

• Commencements need to lift meaningfully to address long-term shortfalls
• Planning processes remain slow and complex
• Affordable housing requirements add cost pressure in some locations

The Housing Delivery Action Plan is a positive step, but it will take time for new supply to flow through to commencements.

Metro infrastructure is reshaping development opportunity

Transport is once again playing a major role in buyer behaviour. Apartments.com.au search and inquiry patterns follow the path of new metro lines, and Stuart sees similar trends in development activity.

The strongest interest is centred around the line from North Sydney through Crows Nest, Chatswood and out to Castle Hill.

The next stage, extending from Sydenham to Bankstown, is expected to unlock further pockets, although feasibility remains challenging in many of these areas given current construction costs relative to achievable pricing.

Developers are tracking these openings closely, with landowners, builders and financiers all watching how transport accessibility is reshaping the map.

How developers are using the data to gain an edge

Apartment Essentials is not just a dashboard. It has become a strategic tool used in several ways across the industry.

1. Investor and board reporting
Clear data on sales rates, pipeline and competitor activity helps internal teams communicate market conditions and manage expectations.

2. Sales team enablement
Agents and project marketers use the data during buyer conversations to position new projects against active competition.

3. Acquisition strategy
Developers analyse where applications and approvals have stalled to identify potential joint venture partners or distressed opportunities.

4. Product and pricing calibration
Real-time insight into apartment types selling fastest allows teams to adjust floorplates, bedroom mixes and price points before launching.

Stuart notes that for many clients, the value lies in eliminating guesswork and reducing reliance on informal phone calls to competitors.

What happens next?

The NSW apartment market is entering a structurally undersupplied period, with demand strengthening earlier than anticipated due to incentives, sentiment and rental pressure.

Supply will take time to recover, which places a premium on well located, well designed and well timed projects that can meet buyer expectations in a tightening market.

For developers, the message is clear:

• Use data to guide acquisitions
• Position projects in transport-led growth corridors
• Align product with the evolving owner-occupier market
• Leverage incentives creatively, not just defensively
• Prepare for higher absorption rates over the next 12 to 24 months

As Stuart concludes, the industry is shifting from caution to confidence. Those who have the right information at the right time will be best placed to capture the next phase of demand.

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