With various property prognosticators warning of a potential over-supply of apartments geared for overseas investors, some developers are taking a fresh look at the owner-occupier market.
“Investors are commercially driven so they are looking for yields and returns on their investments. Investors will have products that they don’t tend to maintain as much, while the owner-occupier market, because it’s a more emotional purchase, they see themselves living there for a long period of time,” said (Jason Wood, development director of Oliver Hume).
Demand is also being driven by a baby boomer generation who would consider moving from the suburban family home for an apartment that was spacious and well-appointed. Even the young urban professionals of Generation Y have very specific views about apartment living — and especially-configured spaces features prominently on the wish list.
Perhaps one of the drivers of this trend is the apparent impasse in Australia’s housing market is with family homes priced out of the reach of many families and first home buyers. According to experts many people who would consider downsizing (which would help free up housing stock), were not happy with the housing options available.
Among those aged 55 years or over who had not downsized, more than 80% said they would certainly do so in the future. However, around 40% of those who had not downsized felt there weren’t enough suitable or affordable housing options in the areas where they would choose to downsize.
The good news is, the sophisticated baby boomer generation would consider apartment living if was created on a ‘vertical village’ model with communal spaces such as private dining areas and bars, libraries and lounges in addition to the standard pool and gymnasium.
And, younger adults filled with wanderlust are showing interest in the co-living concept popularised in London where young professionals have a private hotel-style room, but living, dining and cooking areas take place in communal spaces. For this demographic, being within walking distance of work and trendy inner-city retail, cafes and restaurants are essential.
Surveys of adults aged 18-34 show that efficient use of space is an important feature to 84 per cent of Gen Y property buyers. More than two-thirds want an open layout for entertaining. Most want ample storage and 63 per cent want outdoor space to extend living areas.
And developers are beginning to respond to this changing market with some developers focusing on creating three bedroom apartments to meet the owner-occupier who is making a deliberate decision to choose an apartment over buying a house.
A Brisbane developer recently reconfigured the internal layout of apartments to reduce the number of studio and one-bed apartments in favour of combining space to create more two-bedroom apartments.