Australia’s building boom is set to end thanks to a “tsunami of supply” according to economic forecaster BIS Shrapnel.

Its Building in Australia 2016-2031 report says the fall will hit apartment building the hardest, with the number of new multi-residential developments forecasted to drop by half, from around 107,000 a year currently to just 53,800 by 2019-20.

After reaching an “improbable” peak of 220,100 new dwellings in 2015/16, Dr. Kim Hawtrey, Associate Director at BIS says a build-up of housing completions and slow population growth means supply will soon overtake demand.

The worst declines will be in the ACT, Northern Territory and Tasmania, but other states will also fall sharply with Western Australia dropping by -19 per cent in 2016/17, followed by Victoria at -17 per cent and Queensland at -12 per cent.

The only exception will be Sydney, but residential building is predicted to slow down there too. “Investor demand is cooling, and the city will see a surge in new supply coming on stream over the next one to two years,” Dr. Hawtrey said.

With the market not expected to lift again until 2020/21, will it be bad news for developers looking to go ‘vertical’ when it comes to new villages and homes?