The number of demolition projects in Australia is predicted to fall in the coming 12 months, but some areas are still seeing a high level of knockdown activity, according to new analysis.
Ray White Data Analyst William Clark said the latest ABS demolition statistics covering the December quarter showed a decrease in the number of house demolitions but an uptick in the number of unit demolitions.
The uptick in unit demolitions was despite rising interest rates, Mr Clark noted.
While the total number of demolitions had peaked after recording a strong uptick over the COVID-19 pandemic, some areas were still showing strong activity.
“Looking closely, we can see different geographies have continued to have strong levels of knockdowns, and we can reasonably expect the benefits of continued investment to flow into these communities,” Mr Clark said.
This activity was typically a precursor to further development in the area, he said.
“Demolitions only represent a small fraction of dwellings in Australia, but high levels will often be followed by increased supply or increased quality of housing,” he said.
Mr Clark said knockdown activity was strongest in high-density cities.
“Unsurprisingly perhaps, property knockdowns have been concentrated in the cities rather than the lower-density regions of the states,” he said.
“For houses, Sydney and especially Melbourne dominate, and while most relatively affordable suburbs feature for Sydney, Balwyn North and other Melbourne suburbs on the list appear to be more up-market.”
“In units, new stock appears to be on the horizon for Surfers Paradise and the rest of the Gold Coast.”
Mr Clark predicted the total number of knockdowns would continue to decrease in the months ahead as developers’ costs increased.
“In the next 12 months, it’s likely that knockdown numbers will continue to drop, as interest rates remain high to combat historically high inflation,” he said.
