A new report has found apartments are outperforming standalone houses when it comes to investments, with the top apartment locations for the next six months being in Queensland, New South Wales, Victoria, South Australia, and the ACT.
Hotspotting Director Terry Ryder said apartments overall were outperforming standalone houses this year in a number of ways, including faster growth in rents, superior price growth rates for much of the past 12 months and a growing share of new dwelling approvals.
“There is a plethora of reasons why apartments are increasingly becoming the property of first choice for homebuyers and investors,” Mr Ryder said.
“It’s not just about affordability – although that plays a big role in our largest cities – but our population is simply embracing apartment living more because of the opportunity to reside in more desirable locations as well as having easy access to lifestyle precincts.
“Developers have also been constructing more owner occupier stock, such as three- and four-bedroom apartments, as well as offering superior resident facilities such as rooftop and BBQ areas, infinity pools and spas, private dining rooms, and even the complimentary use of vehicles for those who don’t have transport.”
Hotspotting General Manager Tim Graham said while the shift to higher density living has been underway for decades, Australia still had a long way to go compared to other global cities such as London and Singapore.
“In London, apartments comprise 94 per cent of dwellings, while in Singapore it’s 93 per cent and in Hong Kong it’s 84 per cent,” Mr Graham said.
“In comparison, about 46 per cent of residences in Sydney are apartments, while in some smaller cities such as Hobart that percentage drops to just 15 per cent.
“More than 50 per cent of new dwellings currently under construction are higher density, however, this figure still falls short of the supply needed for our booming population, which is likely to push apartment prices higher over the medium-term.”
Mr Ryder said investors had long been attracted to apartments because of their historically higher yields and solid demand from tenants.
“Now, we are seeing rental growth in apartments outpace houses, as well as superior price growth over the past year, too,” Mr Ryder said.
“We have significant numbers of downsizers active in the market, as well as hundreds of thousands of overseas migrants arriving on our shores, with many of them coming from cities where apartment living is the norm.
“All of these factors point towards a solid future for apartments that are designed and built to be long-term homes of first choice for tenants and owner-occupiers alike.”
