The Rise Of Apartments

Australia is charging headfirst into its era of apartment living, according to real estate fund managers, Qualitas.

It says that while the proportion of apartments is not as high in Australia as in other cities of the world, it is steadily growing as pent-up demand and affordability issues attract even more people to apartment living.

Qualitas managing director Andrew Schwartz says if demand for apartments continues at the same pace, it could triple the number of apartments being developed to about 75,000 a year.

He says new-build apartment prices have increased by between 15% to 20% to make them financially viable for developers, and that is not deterring buyers.

Schwartz says the biggest issue is the capacity of the Australian construction industry to build more apartments.

In the 12 months to  September 2024, housing starts of new apartments, townhouses and semi-detached homes totalled 59,728. In previous years it was almost double that.

Schwarts says Sydney and Brisbane are the hardest cities to get apartment projects going as they are both experiencing labour shortages.

“We still need more players in the construction industry if we’re going to achieve the volumes and competition the industry needs,” he says.

Data from the Strategic Property Group shows that about half of all homes in Sydney are apartments.