It is conceivable that at some point in time there could be a large reduction in investor demand for apartments, perhaps because of fears of over-supply. But because of the production lag, there would still be an 18-month supply of partly-built apartments to come onto the market and to be digested by it.
With the trend towards large-scale developments which take longer to complete, it is possible that this lag has been lengthening in recent years. For these reasons, we at the Reserve Bank have been concerned about investor housing for some time.