In September this year, RPData released national property growth figures that showed unit growth had caught up to that of houses around the beginning of 2008. They maintained a level growth rate for several months and since the middle of last year apartments have consistently exceeded the rate of growth of houses.
“The equivalent level of capital growth associated with units is a relatively new phenomenon. Over the last ten years houses have outperformed units by about two percent per annum” stated the RPData report.
Traditionally we have seen the capital growth rate of houses in inner city areas clearly exceeding the rate of growth of apartments. There are many reasons for this, possibly the main one being that houses have a land component and are a limited resource, whereas many new apartments have been built, particularly in rezoned industrial areas such as Pyrmont, Alexandria and along the Parramatta River including Concord, Abbotsford, Rhodes, and Meadowbank. So why the sudden surge in values?
The RPData report cites some possible reasons. One idea put forward is housing affordability – the national average price for units is around $100,000 less than it is for houses. Other reasons they suggest include an increase in downsizing baby boomers, professionals in their 20s and 30s wanting to live closer to work and the rise in overseas students creating a whole new market. Certainly the first home buyer benefits, which were increased late last year, has seen unprecedented levels of buyer activity in the apartment sector of the market.
Sydney is one of those modern cities where the dream of owning your own home is alive and well. Young families look to move out of apartments into a house with some land soon after (or in anticipation of) having their first child. So the traditional apartment dwellers have been polarized between the young and childless and the empty nester – with some perennial professionals and gay couples thrown in for good measure. This is in stark contrast to older European cities such as Paris, London or Rome, where families live in apartments and make great use of local parks and community areas.
Published:- 13 Nov 2009
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