One in 10 Australians are now living in an apartment, recent Census findings show, and that apartment is much more likely to be a high-rise apartment than ever before.
“More Australians are living in apartments than ever before – a trend that is driven by many factors including affordability, proximity to transport and employment, the desire for low-maintenance living and the growing appeal of first-class high-rise building design and amenities,” said Ironfish National Apartments Manager, William Mitchell.
“There is now around 1 (occupied) apartment for every 5 (occupied) separate houses in Australia, compared to 1 in 7 back in 1991. This is a significant shift for Australia and provides insight into our changing market. Investors need to understand this change, and what implications it may have for their purchasing decisions. It is important to understand what the buyers of the future want, and how your purchase today can best meet those demands.”
Apartments Vs Houses
Over the past 25 years, the number of occupied apartments in Australia has increased by 78% to a figure of over 1.2 million dwellings as at the 2016 Census.
During the same period, the number of houses also grew, but at a much more modest increase of 39%. The number of total houses recorded was approximately 6.3 million.
This illustrates that the demand for apartment living is increasing at twice the rate houses are, and it begs the question, what will the demand for apartments be in another 25-50 years, especially as affordability and proximity to employment continue to be key buying factors.
Apartments are now well and truly associated with high-rise living. Census results confirm the rising prevalence of apartments in four or more storey blocks. In 1996, nearly one in five (18%) of all Australia’s occupied apartments had this structural characteristic. By 2016 this had more than doubled to 38% of all occupied apartments (or 463,557 in number) within four or more storey blocks.
This trend is expected to continue as high-rise living becomes more mainstream, and buyers place more importance on the level of amenity that can be secured in a high-rise building.
Over the year to March 2017, Australia’s population grew by 389,100 people to reach a total population of 24.5 million. A substantial 60% of this growth was through international migration. Interestingly, the overseas born population are more drawn to apartment living that Australian born people. Only 6.7% of all Australian born people (who live in private dwellings) were living in apartments on Census night in 2016. This compares with 17% of all the overseas born population who were living in apartments.
“Therefore, as Australia’s population continues to grow, driven primarily by international migration, it is expected the appetite for apartments will grow proportionately as well,” said Mr Mitchell.
The urban apartment dweller
The growth in apartment living is primarily an urban phenomenon, concentrated within Australia’s 5 major capital cities of Sydney, Melbourne, Brisbane, Perth and Adelaide. NSW had the highest proportion of apartments relative to all occupied private dwellings (at 21%).
Given this urban concentration of apartments, it is perhaps unsurprising that a sizeable 21% of Australia’s apartment households reported having no car. In Victoria, the number was even higher, with a quarter of its apartment households being without a car.
By comparison, less than 5% of house dwellers had no car, 28% of separate house dwellers had 1 car and 39% had two cars. The ‘two-car’ lifestyle was maintained by 16% of apartment households.
Most popular areas for apartment
Four out of Australia’s top five areas or suburbs for apartment dwellers on Census night were either in Melbourne or Sydney. However, central Perth — with more than 22,000 apartment dwellers — came in at the fifth most populous suburb in the country when it comes to apartments.
These changing living trends and demographic insights demonstrate an Australia that is making a definite shift away from the suburban ‘quarter-acre block’ ideal of the past. The new Aussie dream may well be set much higher in the sky, creating different types of community structures, living arrangements and lifestyle necessities. For investors, these factors provide important insights into the changing needs of future tenants in Australia and the need to appropriately address this demand.
If you are interested in further information about investing in an apartment in one of the 5 major capital cities, or you would like further information about the Australian property market, please reserve your seat at our next property investment seminar.