As most would-be homebuyers know all too well, Australia suffers from a housing supply shortage, which experts cite as one of the reasons property prices are among the highest in the world.
This month, however, there was some good news for potential homebuyers thanks to housing data from the Australian Bureau of Statistics (ABS) showing a year-on-year increase in the number of homes being built. And with apartment blocks driving the growth, it would appear apartment living will become more common across Australian cities.
The ABS data showed that building commenced on 163,250 new homes in the 12 months to September 2013. Dr Harley Dale, chief economist at The Housing Industry Association (HIA), said the commencements pointed to an ongoing home building recovery.
“Looking past the spike in activity due to the GFC-related stimulus, that is the strongest level recorded since 2004,” Dr Dale said. “The recovery is being driven primarily by other dwellings (multi-units) rather than detached housing.
“Both segments are growing, but annual commencements for detached houses are 9 per cent below their 20-year average while commencements of multi-units are running 35 per cent above their 20-year average.”
In Sydney, our largest capital city, 27.6 percent of residents live in apartments, according to the 2011 census – up from 23.9 percent in 2001. And soon Sydney-siders will have more choice when it comes to apartment living, with three new high-rise residential blocks planned for the harbourside Barangaroo site, currently under development, a 240-metre tower going up on Bathurst Street, and a $1 billion development in Harold Park, Glebe, that will offer 1250 apartments and townhouses.
Nationally, 13.6 percent of Australians live in apartments, which is still a far cry from the 75.6 percent living in separate houses. Another 9.9 percent live in semi-detached homes, terrace houses or townhouses.
While you may not own your own piece of land, there are many benefits to buying and living in an apartment, including the lower purchase price and lower levels of maintenance than a sprawling house. For investors, apartments usually generate higher rental income than houses, particularly if they are located in popular inner city areas.
If you decide apartment living is for you, here are some things to consider while houses hunting.
Checklist for buying an apartment
- Check strata levies and factor the cost in your annual budget. Can you afford any annual fee increases or special levies?
- Arrange a Strata Inspection Report – this covers a regular inspection of the state of the building, and also the strata records to view the finances and any issues recorded for the building.
- Check if the building is due for any major maintenance projects. This will incur a special levy.
- Does the apartment include a secure parking space?
- Check the acoustics – how solid are the walls? Can you hear the neighbours?
- Check the security – can anyone walk into the building?
- What are the by-laws of the building you must adhere to? For example, is the block pet friendly?
- Have you got your finances in place? Compare rates using a free site such as RateCity.com.au