One of the big trends of Australian real estate in 2023 was the ongoing emergence of apartments as a challenger to the dominance of houses as the dwelling of choice for more and more people.
This was one of the key findings of our surveys in 2023 for the quarterly editions of the Price Predictor Index, which confirmed the emergence of unit markets – and this trend took on greater force as the year progressed.
Suburbs where apartments dominate the dwelling mix are now among the most powerful markets in Australia – which makes our new Top 10 Apartment Hotspots report essential reading for investors seeking opportunities in 2024.
In the Summer edition of The Price Predictor Index, The National Top 100 list of Supercharged Suburbs included 24 in the Greater Sydney area, of which half were locations dominated by units.
Inner-city suburbs in Melbourne, Brisbane and Perth also featured prominently on this list,
while the National Top 10 Municipalities list included the City of Melbourne, the City of Sydney and the Brisbane-inner precinct – as well as Gold Coast City, where a sizeable proportion of buyer demand is directed towards apartments.
The dominant paradigm of real estate (that houses on land show superior capital growth to units) is being challenged, as a growing number of important cohorts push demand for apartments higher.
Those seeking out well-located and affordable apartments include older people downsizing from a large family home.
They also include …
young people seeking an affordable first step on the property ladder; lifestyle buyers seeking low-maintenance, lock-up-and-leave options in good locations; overseas migrants from countries where unit-style living is the norm; and investors seeking affordability and higher rental yields in good locations.In inner-city precincts in our biggest cities, houses can typically cost over $2 million, but apartments can be bought in the $600,000s and $700,000s in the same suburbs in many cases.
The rental yields are also significantly higher, a key consideration in times of higher interest rates – although it needs to be remembered that apartments do entail additional costs like body corporate fees.
So there is a significant list of good reasons why apartments are attracting growing demand from a range of buyers and capital growth rates are improving.
This makes our new National Top 10 Apartment Hotspots report a document of increasing importance for property investors.