Are apartments becoming the star of the show this year?
Apartment prices in Australia have gone back up to their 2022 peak after a small dip last year. Over the past 12 months, apartments and houses have shown the same growth.
Apartment prices in Australia are now at their highest level since 2022, barely dropping last year. In the last 12 months, apartments and houses showed similar growth. Surprisingly, in Brisbane, apartments are now outpacing houses in price growth, and nationwide, rents for apartments are increasing twice as fast as houses. This challenges the common belief that houses always perform better than apartments. What led to this change, and will it continue?
Apartments quickly reached their peak because they didn't increase as much as houses during the pandemic. Lockdowns made apartment living less enjoyable due to limited movement and closed amenities. Now, with life returning to normal, urban living is attractive again. People are returning to offices, cafes, and nightlife are back, and demand for apartments is surpassing supply. The situation of limited apartment availability won't change soon as fewer are being built. High construction costs and approval timelines contribute to the shortage. However, the strong price and rental growth may make more projects feasible.
In the future, more Australians will live in apartments. Compared to other big cities, Australia has low population density. Even in Sydney, where density is highest, half of the homes are still detached houses. In Hobart, only 15% of homes are apartments, causing difficulties for students looking for housing and downsizers seeking accommodation.
If we don't have more apartment buildings, we'll have to keep expanding cities outward, which is costly and forces us to rely more on cars. When we limit apartment construction, younger people and those with lower incomes struggle to find homes in established areas. Older people also find it challenging to downsize in the same neighbourhood. While apartments are financially doing well this year, in the long run, we need to promote higher densities to improve city living and offer fair housing options for everyone, regardless of age or income.
As a real estate company, YES Real Estate acknowledges the changing dynamics of the property market and commits to supporting clients in finding the best housing solutions, including apartments, to suit their preferences and needs. Our focus remains on facilitating fair and accessible housing options for all clients, ensuring a positive and satisfactory real estate experience.
