Research by property services group Oliver Hume, ‘The Rise of the Apartment: Q3, 2014’, shows fresh demand for multi-unit housing – apartments, townhouses, flats and units – following three “lacklustre” years for home building across Australia.
Andrew Perkins, Oliver Hume National Head of Research, said several factors were driving the shift to apartment living in larger capital cities, including affordability and the changing lifestyles of baby-boomers and young professionals.
“Housing affordability is a serious issue that has placed significant pressure on property buyers,” Perkins said. “For many average Australians, the dream of home ownership is simply out of reach and apartments have become a more affordable and accessible alternative.”
Perkins added that the median price of multi-unit dwellings in Australian capital cities was $482,000 in Q3 2014 – 17 per cent less than the $580,000 median cost of a house.
Marcus Buskey, Oliver Hume Joint Managing Director (Queensland), said cultural and social factors were driving demand for higher-density living.
“Large numbers of baby-boomers are becoming empty nesters, with many looking for smaller, low-maintenance homes,” he said. “Younger people are also marrying later and having fewer children, and divorce rates are high and the number of single-parent families is increasing.”
A shortage of land for housing in most capitals’ outer suburbs meant the trend towards inner-city high-rise apartments was likely to continue.
“The cost of developing land for housing in the outer suburbs has become increasingly expensive and this is mainly government-induced,” Buskey said.
“More developers are favouring the middle and inner-city suburbs for medium-density developments. These suburbs also better serviced by public transport and other major infrastructure.”
According to the report, multi-unit housings’ share of dwelling approvals in Queensland has jumped from 31 per cent to 46 per cent since 2008/09.
Oliver Hume attributes much of this to a rise in approvals for high-rise apartments, with the sector’s share of dwelling approvals doubling to approximately 24% between 2008/09 and 2013/14.
“There are currently around 180 projects at pre-construction, under construction or completed with residual product being marketed across SEQ with a fully developed yield of approximately 25,300 units,” the report says. “More than 80 per cent of these
projects are in the Brisbane Local Government Area.”
Source: News Release, Property Council of Australia, 08 December, 2014