26 Apr Why apartment living in Australia is growing?
In today’s show we talk with Carolyn Boyd, a property journalist, about why so many people are being lured into living in apartments and we point out some issues you should take into consideration if you investing in units.
Kevin: There’s no question about it. Apartment living in Australia is certainly surging. There are a couple of reasons for that, possibly. One is affordability. The other one is definitely lifestyle. I read an interesting article that was written by Carolyn Boyd, who is certainly no stranger to us and has written many great blogs on behalf of Domain and spoken to us in the show, as well. She joins us.
Carolyn: Hi, Kevin.
Kevin: It’s great to be talking to you again. I was really interested in your piece. I mentioned there about two things: affordability and the other one is all about lifestyle. Are they the only two major reasons, do you think, behind this surge in apartment living?
Carolyn: I think they certainly are the two main drivers, and then there’s also a demographic change with the aging population – people getting older and then selling off their house and then moving into often a large apartment to downsize.
Then there’s the other change, as well, some of the cultural change that we’re seeing, particularly people who are moving from other countries who are very used to apartment living actually preferring that style of living over having a house, because that’s what they’ve grown up with.
Kevin: Of course, there are several different profile buyers. There are first-home buyers, downsizers, investors, and I guess to a lesser extent, young families. But developers are certainly responding to this, and a lot of it has to do with land supply, as well, Carolyn, making the most out of the land we have.
Carolyn: It certainly does. Particularly in those infill areas closer to the city, it often makes sense to put apartments in those places. In fact, of course, local councils and governments are somewhat pushing that, although that is a bit of an area where people aren’t always happy to have very high-rise apartments, but certainly to get a bit more density close to the city and close to infrastructure to make a reasonable argument to put in more high infrastructure like train lines and light rail lines. You need that population sometimes to drive those projects.
Kevin: Yes, we’re seeing a lot of creativity coming into the planning of some of these high-rise apartments, too, with no need to have as much parking, so there are some releases there from the council but also even in greening. We’re seeing a lot of greening happening on the top of these buildings, Carolyn.
Carolyn: Yes. There are some great projects, Kevin, where you’re seeing green roofs. Also, There’s a project here in Sydney where they have a device that reflects light back into the internal courtyard or the area between the buildings, so you’re seeing some innovation come through, which is fantastic.
Some of these roof-space gardens are a good idea because it’s making use of a space previously that may have just had the air-conditioning units and that type of stuff on it. But instead, now you are seeing more examples of where people are putting in barbecues and shared garden facilities that are actually usable space on the rooftop.
Kevin: I know you’ve researched this, Carolyn, as you always do. But for anyone considering getting into an apartment, what are the main considerations they should bear in mind?
Carolyn: I think the old saying, of course, “location, location” is just as important in an apartment, because you need to be or preferably would be in bigger cities where there’s traffic congestion, close to a transport link, and then preferably close also to things like shops and some facilities.
I think this is something that pops up when people downsize. They often think that they’re going to move to other suburbs, and they end up often sticking around their own suburb but moving closer to facilities that they’ll use as they get older. That’s definitely one thing.
Another thing is, and this is particularly pertinent if you’re buying off the plan, is to really know who the developer is and who is behind the project. Research that. Go and find out if there have been any problems with previous developments they’ve done. Don’t be afraid to knock on people’s doors and talk to them or ask among your circle of friends to see if they have bought into any of their previous developments. That’s a big one.
Another important one – again particularly for off the plan – is understanding the apartment size and layout, and when you look at those plans, what that really means, how big those rooms really are, and what you’ll really fit into them. Sometimes it’s quite difficult to get your head around that when you’re looking just the floor plan.
Kevin: I guess other important considerations, as well, Carolyn, if you are downsizing, there’s a likelihood you’re going to have a pet, so maybe even check with the body corporate on what you’re allowed to have with pets.
Carolyn: Yes. Some apartments do now allow pets, and that’s fantastic, but you do need to know. I have heard sad stories where people have thought that the development they’re buying into is pet-friendly and found out later on that it’s not, and that obviously creates a huge difficulty because your pet is often part of your family and it’s very hard to move without taking them with you.
Kevin: I guess still for younger buyers, you have to consider what’s coming up in the next five to ten years. If you’re going to start a family, maybe apartment living isn’t going to suit you, so you would want to move out of that and then have it rented, so making sure that it’s in one of those areas that is going to attract good tenants, Carolyn.
Carolyn: I think that’s absolutely right, Kevin. It’s often hard for people in that pre-child stage to imagine what it’s going to be like next and to understand just how much of an impact having children has on the way you live, so do think of that. “Is this something I could live in for a while? If I do decide to start a family, can I live here? Or if not, can I rent it out?”
Therefore, you would be looking a bit more from an investment perspective then – looking at vacancy rates in a local area, looking at how quickly you might be able to sell that apartment if you need to. Is it going to be one of hundreds of similar apartments on the market, or is it something a little bit different that would stand out from the crowd if you need to sell it?
Kevin: Thanks for your time. Carolyn Boyd, thank you.
Carolyn: Thanks, Kevin.