With the population of our major capital cities growing at an unprecedented rate (double that of any other nation in the world), many are asking; where are all of these new residents going to live?
It’s true that Australia is considered “the wide brown land” with plenty of open space, however most of that space is little more than desert or bush and obviously lacking any of the infrastructure or amenity required to accommodate our growing population.
Further, governments at all levels are keen to preserve our natural resources and contain urban sprawl, as well as the costs associated with having to extend our existing cities, suburbs and regional towns. In fact almost every state government now has in place a planning policy that restricts new development within “growth corridors” and calls for an increase in medium and high density dwellings.
Many believe the Aussie dream of owning a large McMansion on a quarter acre suburban block is now but a distant memory, as more and more planning controls lean toward apartment living. This style of accommodation is nothing new in places like the US and Europe, but Australians have been slow to embrace this more clustered accommodation.
Traditionally, apartments have been perceived as somewhere you’re forced to live rather than choose to live, as well as an option more for single people such as young professionals, widowers or DINKS (Double Income No Kids). Mass developments that occurred in places like Sydney and Melbourne earlier this century saw apartments develop a reputation as bland, generic monoliths of the inner city skyline.
The truth is though, apartment living has taken on a new, trendy persona and apartment accommodation is no longer confined to our capital cities. Today, you can find apartments popping up in outer urban areas, coastal towns and even major regional centres.
So will we embrace apartments in favour of detached dwellings as the need for them increases dramatically into the 21st century? And can they be a haven for families as well as the Gen Y’s who currently see them as a great place to live?
The truth is that it’s not so much the thought of apartment living, but a lack of appropriate design that has put off families in the past. Data from the Australian Bureau of Statistics reveals that up to 20% of present day apartment dwellers living in blocks of four storeys or more are families with children. This demographic is increasingly turning to apartment accommodation as a more affordable rental and first home buyer option, particularly in Sydney and Melbourne.
However, a study conducted in Sydney found that half of the families living in apartments in the city’s outer suburbs were not there by choice and felt the overall building maintenance and useable open space were inadequate and off putting. Around 50% of those surveyed said they would rather be in a house and 30% felt apartment accommodation didn’t suit their lifestyle.
These low income families have essentially been forced into spaces that do not suit their needs and are far from family friendly, which begs the question; is it apartment living that Aussie families have been reluctant to accept, or simply poor design that overlooks the requirements of parents and kids in favour of singles and young couples?
It would seem that the latter is more the case, as the vast majority of apartments consist of one or two bedrooms, one living area and little or no communal or private outdoor amenity.
Co-author of a recently released Melbourne paper entitled Vertical Living Kids and Associate Professor of Urban Planning at the University of Melbourne Carolyn Whitzman says, “The needs of children and families have been virtually ignored, and the newly developed areas are lacking essential facilities, services and appropriate open space for these residents. Yet, it is projected that almost 10,000 children aged 0 – 14 will reside in the City of Melbourne by 2021, many of whom will be accommodated in high rise housing.”
Ms Whitman explains that the answer to this apartment development dilemma is to rethink our concept of how an apartment should feel and look with more larger, 3 bed plus options on the bottom three floors of buildings that provide safe play areas for kids, such as internal courtyards. She suggests apartments of the future should accommodate children of all ages by providing interesting, interactive open spaces either in or close by the development.
Importantly, there needs to be more affordable, larger apartment options for lower income families rather than the high end, three or four bedroom penthouses which almost exclusively make up the large apartment market at the present time.
There is no escaping the fact that we cannot possibly continue to build large detached homes that provide affordable living for our growing population. As real estate prices and rental values continue to soar, along with the number of new residents choosing to call Australia home, it is becoming increasingly apparent that apartments will be our primary accommodation of the future.
For property investors and developers, this means now is the time to plan ahead and take action. When you next think about buying an apartment investment or building a new apartment complex, keep in mind the tenants who might be living there and /or the potential home owners who might purchase your property in the future.
We secured a great apartment investment on behalf of a client at Metropole that has a fantastic floor plan with 3 spacious
bedrooms.Purchased in the very popular Sydney beachside suburb of Coogee for $860,000 in February this year, the unit boasts 2 bathrooms, lock up garage and water views. Within 100 metres of the beach, public transport, cafes and restaurants, the location itself is always in high demand.
The apartment is in a small boutique block of eight and has enduring appeal to both owner occupiers and investors. It is in the right location, within the right apartment building and has the right layout, with potential to add further value in the future.
With a rent return of $750 per week representing a healthy 4.5% per annum yield, this apartment is the ideal investment now and into the future.
George Raptis is a director of Metropole Property Investment Strategists in Sydney. He shares his 22 years of experience in the property industry as a licensed estate agent and active property investor. Go to www.metropole.com.au
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