Apartments are developing everywhere; Ned Kelly’s house
Changing demographics and buyer expectations are driving the shift to high-density housing
SYDNEY developers are reaching for the sky with a veritable boom in apartment approvals, according to research by RP Data.
Almost 70 per cent of all dwelling approvals in the harbour city in the year to May were for medium and highdensity housing. And Sydney is not the only city on the up: Brisbane and Melbourne also saw a swathe of new apartment projects approved.
About 27,000 new apartments were approved in Sydney in the year to May, with a further 22,000 apartments slated for Melbourne and 11,000 for Brisbane, according to the research house.
RP Data’s head of research Tim Lawless says the increasing popularity of apartment living is being driven by several factors: the squeeze on housing affordability; the changing lifestyles of the baby boomers; and the different preferences of generation Y.
Housing affordability is under pressure across Australia’s capital cities, with Sydney’s median house price topping $800,000 and Melbourne’s soaring past $600,000. This means many aspiring buyers simply cannot afford detached housing.
“The areas where housing is affordable are a long way from the cities, where our major transportation networks and jobs are,” Lawless says. So many buyers these days are willing to compromise: “They want to live where they work and play, and they are prepared to sacrifice the back yard and the Hills hoist.”
KPMG partner Bernard Salt agrees that many Australians want to live close to “knowledge-worker” jobs at an affordable price.
“The only way this can be delivered is through the greater development of apartments,” he says.
Lawless says the changing lifestyles of the baby boomers, as they downsize from the family home, are driving much of the demand for apartments.
“As they become empty-nesters, it’s logical that they will sell the family home,” he says. “And the ‘lock it and leave’ convenience of apartment living appeals to their changing priorities”.
Similarly, generation Yers, in taking their first steps out of home, want to live close to where they grew up but can’t afford detached housing in these areas so they, too, are opting for apartments.
The other big demand driver for apartments is property investors, who tend to prefer apartments to standalone housing as they are easier to rent and offer higher yields, Lawless says.
Sydney had five of the top-10 regions Australia-wide for unit approvals in the 11 months to May 31, RP Data says.
Sydney’s apartment boom is more geographically diversified than other cities, with around 2000 new units each slated for areas including the inner city, Kogarah, Rockdale and Botany in the city’s south and Chatswood and Lane Cove in the northern corridor.