The Demand for Medium Density Living in NSW
Most new homes built currently in NSW tend to fall into two categories; traditional freestanding houses and apartments. However, low-rise medium density housing provides an alternative, as a more affordable housing choice.
In fact, NSW is witnessing a boom in town house development and a surge in medium density viewership unseen since September 2017.
In Australia, townhouses accounted for 12.7% of resident homes (2016 Census), up from 9.9% (2011 census). The recent NSW state government has also made new concessions for developers to build more boutique townhouses on the urban city fringes.
Medium density housing can range from about 25 to 80 dwellings per hectare, though most commonly the density is between 30 and 40 dwellings/hectare. Such developments may consist of detached, semi-attached and attached (or multi-unit) housing.
“Low-rise medium-density housing is the missing part of the NSW housing stock between traditional free-standing homes and strata-titled apartments,” NSW Planning and Housing Minister, Anthony Roberts, said.
“With the growing and ageing population in NSW, there is a need for a greater variety of houses to suit the range of needs and lifestyles, including growing families and empty-nesters,” Mr Roberts said.
The benefits of the new Low Rise Medium Density Housing Code include:
- Increasing the supply of housing across NSW, especially in Sydney, which will help improve housing affordability.
- Better meet the needs of our changing population by providing a broader range of housing options to suit different lifestyle needs.
- Help to maintain the local character of neighbourhoods with a two-storey height limit. This will ensure the size and scale of development will fit into established streetscapes and new release areas.
- Ensure a consistent approach to the good design of medium density housing across NSW.
Medium density housing enables families to have a greater choice about where they'd like to live and potentially retire. While retirees and downsizers can still afford to live in areas they are familiar with and still be near friends and family.
Let’s examine who is the average medium density user and uncover the growth regions for medium density living in NSW.
The Medium Density User
SOURCE: DOMAIN GROUP PROPERTY REPORT, AUGUST 2018
This suggests the wider appeal of townhouses to a mixed audience of urban dwellers, predominately white-collar workers who are:
- Single Income, No Kids (SINK)
- Empty Nesters
- Dual Income, No Kids (DINK)
Top Growth Regions in NSW & Sydney
The findings in a 2018 research report by Domain Group found that demand for medium density living in Western Sydney, Liverpool and Parramatta is on the decline with greater growth opportunities to be found in the following regions:
- The Hills, 4.7% growth rate
- Sydney City, 4.3% growth rate
- Southern Highlands, 3.9% growth rate
- Lake Macquarie East, 3.2%
- Riverina, 2.6%
Further down the list, within Sydney, both the Inner-West and Sutherland demonstrated a positive growth of 2%, while the Eastern Suburbs were close behind at 1.8% growth.
The growth rate within The Hills district upon closer inspection reflected:
- Bella Vista, 14.3% growth rate
- Kellyville, 7.7% growth rate
- Baulkham Hills, 2.4% growth rate
Type of Medium Density Property Viewed
Despite the desired target audience being either single or couples with no kids, there is a demand for more than one bedroom in medium density structures.
This can be due to several factors, such as:
- Working from home professionals;
- Guest rooms for friends or visiting relatives such as grandkids.
- Living with extended family members
- Hobby Room
Source: Domain Group, August 2018
- 59% viewed a 2-bathroom property
- 54% sought a three-bedroom property
- 54% required two car spaces
- $1.1M the average price of viewed property
The Future of Townhouse Living
Australia is increasingly linked to a fast-growing global population. The populations of Sydney and Melbourne are both expected to exceed 8.5 million by 2061. Our sprawling cities need to transform themselves to become more competitive, sustainable, liveable, resilient and inclusive.
In September 2016, the Centre for Urban Transitions surveyed 2,000 Sydney and Melbourne households in established middle-ring suburbs.
When asked, “What type of dwelling would you want to live in?” nearly 60% of residents in both cities favoured a detached house and yard. This is down from 90% in the early 1990s.
In the space of one generation, attitudes have shifted significantly toward embracing higher-density living.
However, living arrangements extend beyond the dwelling. They now include the choice of neighbourhood and a wider suburban context.
Responses revealed that when location was combined with housing type, this significantly increased preference for medium-density housing when located in established suburbs with good public transport and access to jobs and services. 46% in both Sydney and Melbourne favoured this.
The fast growing population, shortage of affordable housing and positive shift in attitude towards medium density housing presents a great opportunity regarding townhouses for town planners, property developers and the overall real estate industry.
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