More Australians are preferring apartment living, despite the pandemic-induced preference shift towards larger homes.
In fact, the 2021 Census of Population and Housing found that more than 10% of all people in Australia spent census night in an apartment.
Apartment living continues to grow
"Though the 2021 Census clearly shows most people in Australia live in separate houses, the cohort that do live in an apartment is on the rise.
Australia’s housing profile is evolving.
Over the past 30 years, the number of occupied apartments across the country has more than doubled – up 108% – to 1,418,898 dwellings at the 2021 Census."
High-rise living is on the rise
Aside from increasing apartment occupancy, high-density living is on the rise too.
The share of apartments in blocks of four storeys or more has almost tripled since 1991.
Where are these apartments?
Not surprisingly, close to half of all occupied apartments are in Australia’s largest state, New South Wales.
Being the most densely populated, it is home to more than eight million people as of the 2021 Census.
Victoria and Queensland come in second and third.
Unsurprisingly, it's in the capital cities where most apartments are being built.
However, this differs in Queensland, with a large share of apartments cropping up in regional centres like the Gold Coast.
Who's living in them?
Ms Creagh commented:
"The median age of people living in apartments is lower than that of the population as a whole.
Women are more likely to be living in an apartment and this is especially so for those aged 55 and above.
This could perhaps be due to preferences, or longer life expectancies, but also an illustration of the gender wealth gap.
- Also read:Five key findings from the 2022 United Nations Population Prospects
- Also read:Five reasons why the RBA cash rate is likely to peak earlier than many expect
- Also read:Australia’s 50 largest cities
- Also read:Millennials overtake Boomers to be Australia’s largest generation
- Also read:Property price falls spread to regional Australia in July
Factors such as the pervasive pay gap women suffer, alongside lower savings and superannuation wealth as well a tendency toward lower paid more insecure jobs, could be driving women to turn to more affordable options in the apartment market both to buy and rent.
Women aged 55 and above are far more likely than men to live in an apartment.
The cumulative impact throughout each stage of a woman’s life is likely to be a factor here."
During the pandemic, lifestyle has become a greater priority, with proximity to the CBD less so.
And the lockdown experience and tough restrictions made apartment living relatively less attractive for many.
However, buying a house means paying a greater premium.
Since February 2020, the average premium paid for a house in Australia’s capital cities was 43%, but in Sydney and Canberra that was closer to 60%.
Ms Creagh explained:
"National house values have appreciated 38% in the time since the pandemic began to June 2022, while unit values have risen just 16% in the same period.
However, a return of migration, a rebound in the international student market, increasing borrowing costs, and reduced borrowing capacity are combining to buoy demand in the apartment market.
Already, PropTrack data shows unit rental demand is back in a big way as affordability constraints kick in and migration resumes, particularly in Sydney, Melbourne, and Brisbane."
Good news for investors
This is good news for investors, as Ms Creagh further explained:
"Rents are surging and with home prices stalling yields are set to rise.
But homebuyers are also likely to be turning to more affordable options as mortgage rates rise.
For first-home buyers, the cheaper price point of units is a factor, and if the proposed Help to Buy scheme is implemented, there will be a lot more choices in the apartment market.
The same is also true for the extended Home Guarantee scheme.
Apartment living is back in vogue and has the potential to become more so.
Even though we are looking at a downturn in housing prices, units may hold up better."