2023 has already been dubbed the Year of the Apartment. And property market observers expect apartment prices to continue to outperform houses for the foreseeable future.
The latest report by the real estate research firm Hotspotting predicts apartment prices will outpace standalone houses in both rents and values.
“There is a plethora of reasons why apartments are increasingly becoming the property of first choice for homebuyers and investors,” says Hotspotting director Terry Ryder.
“It’s not just about affordability – although that plays a big role in our largest cities – but our population is simply embracing apartment living more because of the opportunity to reside in more desirable locations as well as having easy access to lifestyle precincts.”
Among the 15 Sydney suburbs Hotspotting expects to outperform the market are more densely populated areas close to public transport and amenities, including Zetland where Deicorp has its Downtown apartment project and planned development on Joynton Avenue.
Ryder also notes the attraction of newer apartments having generally superior resident facilities to houses and also being increasingly developed to cater to all household sizes, from studios to multi-bedroom apartments.
While the strong rental growth has attracted interest from investors, Ryder says strong immigration and significant numbers of downsizers is also set to buoy apartment prices.
“All of these factors point towards a solid future for apartments that are designed and built to be long-term homes of first choice for tenants and owner-occupiers alike,” he says.
Year of the Apartment
It was Ray White’s Chief Economist Nerida Conisbee who in July declared 2023 as the Year of the Apartment.
“Part of the reason that apartments have gotten back to their peak so quickly is because they didn’t increase as much as houses during the pandemic. Apartment living wasn’t much fun during lockdowns,” observed Conisbee.
“Now that things are pretty much back to normal, apartment living is again attractive. Most of us are going back to the office more frequently and all the best things about living in higher density suburbs are back. We have moved quickly from a situation where there were too many apartments to not enough. Demand is exceeding supply, driving up prices and rents.”
According to Proptrak, apartment price growth in July continued to outpace houses nationally, with prices up 2.09% on the year compared to 1.21% for houses.
