New statistics show we are becoming a nation of urban apartment dwellers and the great Australia dream of owning a quarter-acre block is on the decline.
The newly-released information from the Australian Bureau of Statistics has major implications for buyers and sellers and acts as a warning to property developers.
Data collected from census night 2016 showed that 10 per cent (or 2,348,434) of all Australians spent that night in an apartment. This means there is now one occupied apartment for every five separate houses in Australia, compared to one in seven in 1991.
The reasons for this huge cultural change are many. The allure of the inner cities has grown for work and recreational reasons; the down-sizing phenomena of “empty nesters”; an increase in immigration, particularly from Asia where apartment living is more common; and the most obvious reason – apartments cost less to buy than houses.
As more younger people are locked out of the housing market, the past 25 years have seen the number of apartments in the country jump a staggering 78 per cent to 1,214,372.
The median age of people now living in an apartment is 33 years compared to the Australian median age (37 years for men and 38 for women) while the median total income for apartment dwellers was $1280 a week, much lower than the $1526 median income for those in separate houses.
Almost half of all Australian apartments are in NSW, with 23 per cent in Victoria and 17 per cent in Queensland. In three states the number of apartments was overwhelmingly in the capital city with 94 per cent of all Victorian apartments in Melbourne, while Perth (92 per cent) and Adelaide (91 per cent) showed a similar big city domination.
The ABS figures also showed that we are embracing the high life: since 1996 the number of apartment buildings of four levels or more has jumped to 38 per cent (or 463,557 in number) of all apartments, compared with 18 per cent in 1996.
While there have been media reports warning of an “apartment glut”, these new figures may give developers an indication of what kind of apartment they should be building.
Families with children (and either one or two parents) comprise almost 44 per cent of all families now living in apartments in Australia while the number of single apartment dwellers has declined, down from 46 per cent in 2011 to 42 per cent in 2016.
As the trend grows towards more apartment living and families choose to stay in those apartments rather than move to the suburbs as previous generations did, then the market for three-bedroom apartments will grow – and not just for the luxury market dominated by cashed-up empty nesters.
Investors might also seek out those three bedders, given that the rental income from a three-bedroom apartment is comparable to that of a three-bedroom house, while the purchase price of a house is usually higher than for an apartment.
But View.com.au chief executive Enzo Raimondo warns that investors or buyers should not rush into the “cookie cutter” apartment blocks that dominate the city centres.
“Every time there’s a downturn or there’s reason to sell, then 10 other similar apartments might be for sale at the same time,” he says.
The rule, as always in buying, is to look for something that stands out from the market, be it an older apartment or in a smaller block, and always close to good transport, he says.