Residential Renaissance – The value of apartments

Apartment prices stabilise

In our cities, apartments have always played an important role – allowing people to live in the inner-city suburbs they like at a more affordable cost than a house. But for a while the gap between apartment prices and homes has been narrowing. Pre-pandemic, international purchasers and investors were driving strong demand among apartments, to the rate that the price of the two property types were closer than ever. [photo below: Folia at Apartments of Tullamore, VIC]

The pandemic has changed many facets of our world and in property it has seen the withdrawal of international purchasers (at least for now) as well as investors to some extent. One of the key market shifts we have seen in this time has been the stabilisation of apartment prices across the board, while house prices have continued to increase. [photo below: Voyager, Yarras Edge, VIC]

This is creating a clear gap where apartments are priced 30-40 per cent lower than houses, providing a compelling value proposition for homebuyers. 

Apartments enable city lifestyle

This is exciting for prospective buyers. Apartments are an important part of the urban fabric of our cities as well as our urban lifestyles. Apartments give us access to our cities, which continue to be economic powerhouses. The majority of firms driving growth and employment are urban-based and this is expected to continue, while high value knowledge-based sectors are traditionally CBD-based. When we consider that industries associated with CBDs have growth at 1.6 times the broader market, delivering 375,000 jobs over the past decade, it’s clear that, despite all the recent global upheaval, our cities will continue to grow and perform. [photo below: Voyager, Yarras Edge, VIC]

Apartments are an important part of the urban fabric of our cities as well as our urban lifestyles.

Apartments are important lifestyle enablers in cities, giving people the ability to access the city. They provide essential access to both physical and social infrastructure allowing people who want to live in certain suburbs access at a more affordable price point than established housing.

Predications of a shortage

This current market gap may not last forever, although we should hope it does for the reasons explained above. While many developers have put apartment projects on hold, we foresee an apartment shortage in the coming years. When immigration returns and our borders reopen there will smaller volumes of new apartments to cater for the increased demand. It’s why we have launched a number of projects to market without significant pre-sales. Buyers are responding too – at Portman on the Park we achieved over $46m in pre-sales in the first few months of launch. [photo below: Portman House, Green Square, NSW]

While many developers have put apartment projects on hold, we foresee an apartment shortage in the coming years.

We believe strongly in the future of apartments as do many of our residents and customers. In the effort to maintain some of the lifestyle benefits we discovered during 2020’s lockdowns, many of our customers say they would live closer to work to reduce their commute, living in an apartment in order to enjoy more time in their day. It is a lifestyle goal we definitely get behind and look forward to helping our customers achieve.