Australians' love affair with apartment living is being driven by affordability and demographics.
A major trend in the Australian property market over recent years has been the growing popularity of apartment living. This trend is underlined by the fact that during the December 2016 quarter, the number of new apartments completed in Australia outnumber houses for the first time - 28,527 new units compared to 28,102 new houses.
The growing love affair with apartment living is being driven by two key factors - affordability and demographics.
For many young property buyers, apartments offer a very affordable entry point into the Australian property market especially in the boom markets of Sydney and Melbourne.
Renting an apartment is also more affordable than renting a house and this economic reality has resulted in a growing number of property investors deciding to buy off the plan apartments because they know there will be a strong rental demand for this type of property.
Demographic changes are also driving the growing popularity of apartments. In particular, there has been a surge in more people living alone while the overall size of households are getting smaller which are combining to make apartment living a lifestyle of choice for people not wishing to live in large high maintenance homes.
At the same time, the ageing of our population is resulting in a surge of baby boomers and empty nesters deciding to sell their large family homes and deciding to down size to an apartment. This proving financially attractive because many of these property owners can sell their existing home and down size to an apartment at a profit that can help fund their retirement.
These important affordability and demographic factors have seen apartment living growing in areas that previously showed resistance to this style of living such as Perth in Western Australia. For many years, homes with a large back yard dominated the Perth property market. However, this is now rapidly changing with apartment developments now moving from outside their traditional home of the Perth CBD into the outer suburbs such as Joondalup, Clarkson, Midland, Armadale and Rockingham.
Buying an apartment can be a great lifestyle choice and achieve pleasing levels of capital growth providing the buyer undertakes research by avoiding the following pitfalls.
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