Australia’s expected housing oversupply is less of a concern than in previous cycles because of less speculative building, and a booming alterations market which will keep spending in the sector higher, according to economists. BIS Shrapnel says the country’s housing construction boom had peaked and would cause a net oversupply by 2018.

The oversupply in markets such as Melbourne and Perth came as little surprise. The Australian Construction Industry Forum’s Kerry Barwise said even if new housing construction did slow, residential construction would stay strong due to a historically high level of spending on alterations and additions. This was partly due to tight housing demand in Sydney, where many people were altering their homes rather than buy new ones, but it existed in other states as well.