Units set for long-term growth of over 50% in one capital city
While units have always seemed inferior to houses, one capital city holds great potential for capital growth, recording capital growth of more than 50 per cent for the last five years.
Apartment living is a trend rising in popularity around the world, and Australia is no exception, according to Doron Peleg, CEO of RiskWise Property Research.
“It could be New York, London, Hong Kong, Tokyo or Tel Aviv. It doesn’t matter. Regardless of the place, it’s the same issue of very strong demand that is not supported by sufficient supply,” Mr Peleg said.
Outlined in a report by the Australian National Strata Data 2018, it was revealed that 9 per cent of Australian residents live in apartments. Other data shows the popularity of apartment living beginning from at least 2015, as this year was the first when dwelling starts for attached properties were greater than those of detached houses in all of Australia’s history and is most notable in NSW, Victoria and Queensland.
This trend, observed internationally, is also being attributed to urbanisation. For example, EuroMonitor International claimed urbanisation is driving up property prices, causing people to gravitate towards the more affordable dwelling, which is typically units. Ubris data also indicates people are opting in for smaller properties, as long as there is shared space and public amenities.
“In the big cities, especially Sydney, in high-demand areas, people embrace unit living,” Mr Peleg said.
“While demand is not as strong as for houses, it is still very strong, achieving capital growth in Greater Sydney for past five years for units of 54.7 per cent.”
There are some locations in the greater Sydney region that has units outnumbering houses, but the more viable kind of units for families, which includes three bedrooms and two car spaces are out of reach for the families who need them, Mr Peleg said.
“So, from an investment perspective, if you can buy a family suitable unit that has three bedrooms, two bathrooms and two parking spaces, close to transport hubs and schools, it will be a huge demand property and this is where the focus should be and where long-term capital growth is a certainty,” he said.