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It’s the year of the apartment as more Australians opt for high density living
It’s the year of the apartment as more Australians opt for high density living
Apartments are now outperforming houses as a source of investment in the Australian property market.
New research released by property advisory service Hotspotting reveals that the apartment market has gained new ground in recent years as more people seek flexible, affordable housing options closer to existing infrastructure. As a result, the high density market was seeing stronger returns in both yield and capital growth.
Hotspot has released a National Top 10 Apartment report, identifying specific Australian suburbs with the greatest potential for investors. The Brisbane suburb of Annerley was the top pick, followed by Belconnen in Canberra, Clayton in Monash, Victoria and Dicky Beach on the Sunshine Coast.
The Sydney suburbs of Gymea and Stanmore were the only NSW areas to make the top 10 while Mitchell Park in the South Australian city of Marion was the sole entry from that state.
Hotspotting director Terry Ryder said the growing popularity of apartments for both homeowners and investors was complex.
“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,” Mr Ryder.
“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 barbecue 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 there was still plenty of room for growth, as evidenced by the apartment market in Europe and Asia.
“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.”
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