Apartment living to become the preferred housing choice
Everywhere we look in our major capital cities in Australia, there is some sort of construction work happening, and a large proportion of this construction work is the development of new apartment buildings.
Apartments are becoming a much more familiar sight today than ever before. From towering high rises with luxury rooftop terraces with swimming pools, tepanyaki grills and outdoor cinemas to the smaller boutique developments, apartment living is becoming an important part of Australian life, whether we like it or not.
Once upon a time, the Great Australian Dream was that everyday Australians would secure a better lifestyle for themselves and their family through the purchase of a detached house, surrounded by a garden on a quarter of an acre block. However, this dream is changing as property prices increase and people want more from their home. Today, the dream is more about getting on the property ladder in the first place and finding an affordable property to buy.
Apartment living is certainly on the rise for owner occupiers and rental tenants and a number of factors are contributing to this. Below are ten factors that indicate why apartment living will become the preferred housing choice of the future.
1. Growing Population
Firstly, the population in Australia is growing. Currently, it is estimated that Australia is home to roughly 24 million people. By 2026, it is estimated that the country will be home to 28 million people.
Sydney is still the largest populated city in Australia and expected to reach 5 million people in 2016, but it is soon to be overtaken by Melbourne. It is predicted that Victoria will grow from 5.5 million people in 2011 to 10.1 million people by 2051 – almost double. 8 million of those will live in Melbourne, whilst 2.1 million are expected to live within regional Victoria.
For Victoria alone, approximately 2.2 million dwellings are required to house the population by 2051, which means 63,000 new dwellings are required every year for 35 years to meet this demand.
2. An Ageing Population
As well as our population growing, people are also living far longer due to improved healthcare and higher standards of living. More residential properties will be required to house them and many baby boomers will prefer to downsize from their larger family home to a smaller new apartment which will involve less maintenance, cleaning and lower running costs.
3. Changing Demographics
Demographics are also changing which will reflect on the housing types required in the future. Lone-person households are on the increase, helped by downsizers and young professionals and couples. Couples are having children later on in life, putting their career first. They are also having smaller families so the need for large four bedroom houses will reduce with an increase in one and two bedroom apartments.
Affordability is another important factor to get an initial foothold on the property ladder. New apartments are generally more affordable than houses, making this the preferred housing option. Sydney is currently the most expensive capital city in Australia, where many property buyers and first home buyers in particular are being priced out of the market. The median house price in Sydney currently stands at approximately $880,000, whilst apartments are $665,500.
One way around this is for buyers to invest in a property first, rather than buy a home to live in. This allows you to purchase new apartments in a growth area such as within Brisbane where prices are more affordable. House prices in Brisbane are approximately $515,000 for a house and $390,000 for new apartments.
If you do buy new apartments as a first home buyer, then there are also a number of benefits and incentives to take advantage of. One of the main ones is the first home owner grant where you can save thousands of dollars. In fact, in Queensland right now, eligible first home buyers can receive $20,000 first home owner grant from the state government.
There are also stamp duty savings to benefit from when buying new apartments, which again can save buyers thousands of dollars, making apartment living even more attractive.
6. Lower Maintenance Living
Apartment living also means that you will have lower levels of maintenance. You won’t have to worry about mowing the lawn every few months or cleaning the shed. Buying new apartments also means that your new property will be equipped for modern day living and you are less likely to have maintenance issues, compared to buying an established house which might have damp problems or require new plumbing.
An ageing demographic will also find new apartment living appealing for this very reason, with less maintenance issues to worry about as well as a smaller property to clean.
One of the popular reasons why more and more people are taking to apartment living is the added convenience that new apartments bring. You are ideally positioned close to public transport routes as well as schools, parks, retail and dining opportunities. This means that you don’t need to travel too far for all of your everyday conveniences, with everything close to hand or even within easy walking distance.
Today, we want everything at our doorstep and don’t want to be spending hours of our day commuting. We are time-poor and prefer inner city living and all of its attractions to live a fulfilled and sociable lifestyle, especially Gen Y who have grown up in a technologically advanced world with information right at their fingertips.
8. More Amenities on Site
Apartment living can also mean having luxury lifestyle amenities on site including swimming pools, stunning rooftop gardens and outdoor cinemas. This makes everyday living even more attractive as well as making your apartment easier to tenant and sell in the future.
9. Stricter rules in place for better apartment living
Each state has different rules for new apartment developments, and Melbourne for example has recently included stricter rules to ensure a more desirable living arrangement both now and for the future.
New apartments in Melbourne will now need to have adequate natural daylight, ventilation, storage and acoustic performance as well as energy and waste efficiency. With the introduction of better and higher quality apartments across Australia, this will also make apartment living much more preferable both today and in the future.
10. Less Land Available
Availability of land is also an increasing problem, especially in Sydney which is restricted by the harbour as well as the mountains. There are restrictions as to where property can be built with more and more homes being built further out west, north and south to cater for this sprawling and increasing population.
As land becomes sparser, this means that we are constrained to building upwards, with more new apartment developments becoming taller. But it’s not just Sydney that has land constraints. Other major cities such as New York and Hong Kong are also utilising vertical space to build taller apartment developments to meet the rising population and we are following their lead.
With an increasing population this creates a higher demand for more housing, particularly new apartments which are more affordable and conveniently placed. With attitudes changing, we now want to live in a property that is close to transport and everyday amenities, whilst provides lower maintenance costs. Plus, everyone loves new, so owning a brand new apartment bought off the plan has its advantages, including access to first home owner grants and stamp duty savings.
To find out more about why apartment living will become the preferred housing choice of the future, and what you need to look out for when buying new apartments off the plan, make sure you speak to one of our expert Property Consultants at iBuyNew who can point you in the right direction and help you grow a solid investment portfolio.
Call us today on 1300 123 463 to learn more.