Real estate and property expert, John McGrath shows us what the 2011 Australian Census revealed in terms of real estate trends and why people are choosing apartments over seperate houses.
By John McGrath
The first round of Census 2011 data released by the Australian Bureau of Statistics reveals some interesting trends in home ownership and how Australians are choosing to live. Two of the most important trends are:
More people living in apartments, townhouses or terraces
More people are renting
Let’s look at them separately, starting with more people living in apartments, townhouses or terraces.
We’ve seen plenty of anecdotal evidence that more people are choosing apartments over separate houses and now there’s data to substantiate it. Over the past five years, there has been a decline in the number of people living in separate houses in every single capital city. If you look at the data state-by-state, the same trend occurs in every state and territory bar Queensland and South Australia, which recorded only a very small increase.
So what’s going on? Well, I can think of a few reasons for the trend in higher density living.
Generally speaking, apartments and the like have always been more affordable than stand-alone houses. It’s not surprising that as Australian property values increase, more people are looking for more affordable options.
Due to a shortage of land, more high-density development was always on the cards. We have a continually rising population and when you run out of land, the obvious solution is to ‘build up.’
People generally want to live closer to the city, primarily for easier access to work and because inner and middle ring areas tend to have better infrastructure such as shops, cafes, transport and recreational facilities. We still have land on our cities’ outskirts for new houses, but fewer people are willing to do the long commute, especially young people. They’d rather live closer to the city and rent.
In terms of size and design, the typical apartment is not what it used to be. Developers are mindful of changing trends and they’re designing apartments that are far more ‘liveable’ with open plan living spaces and designer features. Apartments are no longer the poor cousin of houses, and in fact, many have more features than some homes.
Apartments tend to be congregated around popular lifestyle areas close to existing amenities such as shops, cafes, transport and beaches. Buyers looking to purchase near a beach, for example, are going to find more options in their price range among apartments than freestanding houses.
There are inherent lifestyle advantages to apartment living. For example, there’s the lock-up-and-leave factor with greater security, combined with lesser maintenance such as mowing lawns.
Now to the increase in renting. The number of rented households in Australia has risen by 1.5% from 28.1% to 29.6%. The cost of renting has grown by almost 50% over the past five years while the cost of a home loan has risen by 38.5%. So why are more people renting?
Here are my thoughts:
1. Many Australians have secured employment in the mining industry and this usually means re-locating to small inland towns and renting. The biggest population gains over the past five years, on a state-by-state basis, were in Western Australia (up 14%) and Queensland (up 11%). This compares with 5.6% in New South Wales. So I’d say the mining boom is directly contributing to the rising number of renters.
2. Renting is cheaper than buying.
3. Some people would rather rent in locations they love, such as the inner city or beaches where they can’t afford to buy, than buy and live in an affordable location a long way from the city. Gone are the days when young people routinely ‘headed west’ for an affordable first home. Today, they’re more likely to live by the beach and buy on the outskirts for investment purposes.
If you’re a statistics buff, check out the ABS website at www.abs.gov.au for more information on the 2011 Census.
