A shortage of supply is set to see demand, and prices, for existing apartments grow in the next 18 months according to an analysis by CBRE.

It says at the moment there is a price difference of about 23% between newly built and existing apartments offered for sale which makes existing stock an attractive market for investors, particularly during a period of tight vacancies and strong employment levels. But it predicts that as new supply remains constrained the price difference will begin to close.

CBRE head of research Sameer Chopra, says the high cost of construction and a shortage of new apartments will result in price increases. “Apartment values have not kept pace with construction costs in the past five years,” he says. “That disparity is currently at 23%. We expect this gap to close out and revert to a premium.”

Vacancies are tipped to continue to drop to as low as 1.2% in 2029, down from 1.9% in 2024.
“These tight conditions will endure as vacancies stay at around half of the previous decade average of 2.5%,” Chopra says.