NSW Leads the Apartment Market
There’s been lots of comment recently that Sydney might well be in danger of being flooded with apartments, but the simple statistic is that according to the Australian Bureau of Statistics Sydney-siders love apartment living.
It’s a trend that’s here to stay which is a fact that will come as no surprise.
The demand for apartments started to take-off in 1991 and has been growing ever since. There’s still a strong appetite for detached homes but the numbers are changing.
In 1991 the ratio was one occupied apartment to seven detached homes, in 2017 that had changed to one in five. Although the ABS do not count townhouses as apartment living, townhouses have also become increasingly popular.
One of the big benefits of more demand for apartments has been a massive increase in the quality and design of new projects. Across all markets developers are now delivering projects that offer great lifestyle options.
One key factor has been the growth in high-rise projects, leaving behind the old three and four-level ‘walk-ups’ of a few decades back. Again, we see the ABS figures show the trend. In 1996 18% of apartments were in buildings over 4 levels, by 2016 that had increased to 38%.
Given site values and the cost of building, those figures are not a surprise, but it’s also true that high-rise buildings allow more buyers to live in popular areas close to facilities including transport links.
Planning policies, in particular for NSW, also favour this style of development in key growth areas and so we’ve seen high-rise projects spread way beyond the more traditional inner-city locations.
NSW The Biggest Apartment Market
When last counted by the ABS (in 2016) Australia had around 1.25m apartments and 47% where in NSW, way ahead of other states and followed by Victoria at 23% and Queensland 17%.
Further as a percentage of the total local housing stock apartments accounted for 20.7% in NSW followed by the NT at 17% and the ACT at 16%.
Clearly the NT and ACT are much smaller markets and these figures demonstrate how apartments are popular regardless of the size of the local housing market.
The ABS figures also highlight another interesting fact, and that concerns the spread of high-rise developments across different states. In three states, more than 90% of apartments are located in the state’s capital. That’s 94% in Melbourne, 92% in Perth and 91% in Adelaide.
In NSW and in Sydney high-rise apartments are more dispersed across the metropolitan area, and here again we see planning policies delivering that outcome. In Sydney, diverse locations away from the CBD now have high-rise apartment buildings including Homebush (Olympic Park), Parramatta, Chatswood and Liverpool.
NSW More Residents
At the last census Australia had around 2.35m people living in apartments (counting both residents and visitors). The majority, as might be expected and in-line with the other trends, were in NSW with 1.2m, followed by Victoria at 506,000 and Queensland 381,000.
These figures again show how apartments in NSW are by far the biggest market and generally widely dispersed beyond just the core CBD.
However, the number of residents living in apartments as a general measure of the population is below that of detached homes. The figures are not unexpected given that apartments comprise many more 1 bedroom and 2 bedroom apartments thus, you would expect this to be the case. Apartments generally house 1.9 residents and detached homes house a higher density at 2.8 residents. As the demand for more 3 bedroom apartments increases these figures may well start to shift.
In Sydney, the three most populated apartment areas were Waterloo-Beaconsfield (Beaconsfield adjoins Green Square), Sydney City (Haymarket and The Rocks) and Parramatta-Rosehill. The southern end of The Rocks includes several well known high-rise apartment projects.
Age & Gender
While the figures do vary, there are three main age groups living in apartments and the groups are diverse. They range between 0-14 years and 85 years plus.
The biggest age group at 29% is the bracket 25-34 years of age with slightly more females, followed by 85 years old at 12% and then those residents who by contract are 0-14 years old at 11%. However, children in their early school days aged, 5-14 years old make up the smallest group.
What These Figures Tell Us
The ABS is a gold mine of information and while there are more figures detailing aspects of the apartment market, I’d like to finish by reflecting on the above figures. What do they tell us about the apartment market, both historically and in planning projects for the future?
Number one is the reality that Australian’s have taken to apartments with zeal, not as their second option but as their preferred lifestyle. And they have done so in varied locations, a point that is well demonstrated in the Sydney market.
I also think developers have done a good job in evolving the quality and style of apartments that are taken to market. A major high-rise project requires a big investment in planning and delivery and the industry does a good job. Individual apartments and buildings are world-class.
Location is also a key factor, above all buyers want convenience and apartments can deliver access to great facilities. The private sector does this with terrific retail and entertainment facilities and governments are literally racing to provide better transport. Although in some areas they need to move faster with more schools.
There will continue to be new challenges as high-rise apartment living delivers much higher population density meaning transport will be a big factor. We can’t relax, but so far buyers are, as these figures show people are happy to live in apartments and so the product must continue to offer exceptional quality, planning, amenities, convenience and variety. Equally for owner-occupier and investment properties.
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