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(EstateNewsWire.com, August 24, 2012 ) San Francisco, CA -- No matter what method you use to measure it, it’s clear that the Australian housing market is shifting from houses to apartments. Apartments have become an increasingly popular option for Australian residents as well as foreign investors. Recent research shows that almost half of all housing sold in Sydney is now apartments. The trend is similar but somewhat lower in Melbourne, where approximately 30% of all housing sold is apartments, as well as in Brisbane where the percentage is 25%.
The number of apartment buildings under construction also continues to increase, while at the same time the construction of traditional detached homes is decreasing. According to the Australian Bureau of Statistics, approvals for building apartments increased by 50% through June 2012 while approvals for building detached homes decreased 7.7% during the same time frame.
One of the main reasons for the shift to apartments is their relative affordability. The average Sydney apartment costs around $480,000.00 while the average detached home is nearly $600,000.00
Michael McNamara, managing director of valuation group Herron Todd White, states that the trend seems to be a growing conservatism in the market. People are now buying within their means or even below their means.
Another reason for the increased demand for apartments is the desire for housing that is close to the city. According to census data, there has been a 50% increase in rental prices from 2006 to 2011.The increased rent prices make investing in the construction of apartments more appealing to investors. Apartments also tend to return relatively higher yields than do detached homes.
McNamara says this about the current market situation:
“Rents have been increasing at a compound annual rate of 8.45% over the last five years while the annual growth of household incomes over the same five-year period sat at a more stagnant 3.5% per year. The discrepancy has created a landlord’s market over the last five years.”
One possible problem is the lingering perception that houses hold their values better than apartments due. This can still be true in resort areas such as Mandurah (in Western Australia) and the Gold Coast (in Queensland); these areas plunged in value during recent years. But in the major cities, investors are finding that apartments actually hold their value better than houses do.
“When you look at the long-term trends over the last few years, apartments hasn’t seen as large a loss in value as houses have,” says RP Data head of research Tim Lawless. “This can probably be tied back to the original lower price point. These days, affordability is such a concern particularly in Sydney. It makes a lot of sense that potential buyers are doing research before buying, and are prepared to sacrifice the backyard to live close to the city.”
Another reason for the growth in apartment construction is that foreign investors are often not allowed to own houses due to foreign ownership laws. These laws generally don’t apply to investments in apartments, making them much more attractive to foreign buyers.
An additional reason for the surge in apartment living are the changing social preferences of tenants. People are delaying marriage as well as delaying having children, and the relatively low maintenance of an apartment can appeal to families who have two or more working adults in them.
The 2011 census shows that Australia’s 1.17 million apartments (14.3% of the total housing available) are playing a larger role in urban life than they were before. In 10 years (which is covered by 3 census reports), apartments occupied by only one person decreased from 46% to 42%. The major reason for this decrease was an increased residency in apartments by families. Families accounted for 41% of the nation’s apartments in 2011; in 2001, that percentage was 35%. Additionally, the number of families with children living in apartments increased 2% over the 10 year period.
About Abode318.com.au:
Abode318.com.au (http://www.abode318.com.au/) is Melbourne’s new 56 story luxury building offering apartments for sale. Abode 318 is one of a few apartments now selling in Melbourne as apartment buildings are on the rise. New apartments in Melbourne may be aplenty, but there are none like Abode 318.
Abode318.com.au
Victor Grubb
4152130987
contact@Abode318.com.au
Source: EmailWire.Com 
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