Apartment living – The preferred residence for Australians

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Apartment living in Australia

There has been a recent debate on whether apartment living is better than living in separate houses. There are many people who believe that apartment living is much better because it offers more convenience and a sense of community.

On the other hand, there are some people who think that apartments living in Australia can be quite boring and restrictive.

Let's dive in and take a look at both sides of the argument and some recent research that might help you make a decision on whether apartment living in Australia is good for you.!


Recent research on Apartment living in Australia

A growing number of younger Australians are giving up the dream of owning a home with a backyard as housing costs in capital cities have risen beyond their means.

The new, great Australian dream quickly evolves to include raising a family in an apartment.

Australians are moving into flats in unprecedented numbers as the cost difference between renting a private home and an apartment keeps growing. How can you make your Australian apartment ownership fantasy a reality?


The 2021 census highlights for Apartment living

  • City living is home to almost 1.3 million people, up 1.1% from 2016.
  • At 1.1 million, the number of Australians who reside in terraces and townhouses has remained constant.

Dr Michael Fotheringham, managing director of the Australian Housing and Urban Research Institute, claims that low- to middle-income households, particularly those amid a rental crisis, cannot fulfill the 1950s dream of raising a family in a home with a backyard.

However, since it was finished last year, rental prices have continued to rise, even though the 2021 census did not evaluate the housing crisis.

According to SQM research, the average weekly rent in capital cities was $577 for all houses and $421 for all apartments as of August's census.

Average rental costs have been rising ever since. The typical weekly rent in Australia's big cities is $508, according to April 2022 data, marking the nation's quickest rate of growth in 13 years.

Sydney's rental rates are also skyrocketing, with mid-point dwelling rents rising by 9.1% from March last year to $600.

Additionally, this marked the sharpest yearly growth since 2009.

Apartments are becoming more popular, according to Fotheringham, in part because of lower rates and a demand for more supply.

One in ten Australians already lives in an apartment, which could rise as freestanding houses become less affordable.


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Advantages of apartment living

Apartment life provides several advantages, like better pricing, less maintenance, lots of conveniences, increased security, insurance cost reductions, and more freedom to live anywhere you want.


1. Affordability

If you're a first-time home buyer or you have a limited budget, affordability may be attractive to you.

According to CoreLogic data, the median apartment value in Australia's capital cities in August 2021 was $617,805, which is $199,734 less than the typical house value of $814,539.

A reduction in the purchase price may also have additional advantages, such as a reduction in up-front expenses like stamp duty tied to the purchase price.

2. Less maintenance

Apartment residents should not worry about maintenance. Either the landlord or corporate body will take care of the maintenance of the building, gardens and amenities. It means more savings on maintenance expenses and less time weeding the driveway. But if you own your apartment, you may need to pay body corporate fees.

3. Amenities

Many apartment complexes have all the features, including pools, spas, barbecue areas, and well-equipped gyms. It can save on costs like a gym membership. Also you will find different sizes such as a two bedroom apartment, apartment with kids' room, etc.

4. Security

The Australian Bureau of Statistics found that 60% of apartments have security features compared to one in two houses. Apartments often feature key code entry systems or intercoms that help to prevent intruders from entering the building. Other residents are likely to notice any suspicious behavior.

5. Location

Choosing an apartment rather than a house can be the key that lets you live exactly where you want to be – whether near the city life or beach, or above street level. Selecting a proper location is crucial before investing in real estate.

6. Savings on insurance

As an apartment owner, you'll need to take out contents insurance to cover the value of your assets. But building insurance is paid for by the body corporate, which ensures the entire complex.

Disadvantages of living in apartments

Living in apartments can include less privacy, a smaller living space, more noise, strata levies and reduced renovation potential.


1. Less privacy

Apartment living can mean compromising privacy. You will share additional facilities such as a gym or pool with others. 

Your balcony could be right alongside your neighbor's. An apartment may not be your ideal choice if you hate communal living.

2. Less living space

A CommSec Home Size Report says,

  • Australian homes – both houses and apartments, have increased in size in recent years. But on average, houses win for square metres.
  • The average new house built in 2019/20 was 235.8 square metres, compared to 136.8 square metres for new apartments.

Of course, a smaller size can mean lower energy bills, less housework and savings on furniture. But there are drawbacks too.

An apartment will have limited private outdoor areas and less storage space, which can be a tight squeeze for the family members.

3. Noise as a health issue

Noise affects mental health and concentration, impacting working from home. Non-traffic-related noise complaints are rising, particularly in medium and high-density housing areas. Many new medium and high-density residential structures are noisy, and the sound insulation requirements for apartment buildings are not high.

4. Strata levies

Expect to pay quarterly strata levies if you buy an apartment. These cover the cost of maintaining the building and shared facilities. The more facilities, the higher the strata levies are likely to be.

5. Less renovation potential

Since an apartment is part of a larger building, you can't undertake renovations that a house offers. Something as simple as installing downlights can be a problem as it means drilling into the ceiling.

You may have to let the body corporate know about any renovations involving changes to your apartment's exterior or if the work could impact other residents through the noise.

If you're planning on buying a bargain apartment, you will have constraints adding value through renovations.

Home loan options for buying apartment

Securing a loan to buy an apartment is much the same as getting it for a house. The lender will look at your income, property value, and deposit size.

There are two traps to avoid when Looking for a home loan to buy an apartment. The first is that lenders may shy away from certain postcodes where there is a significant oversupply of apartments. 

Banks don't make these postcodes public, so talking to a mortgage broker or local property expert would help.

The second issue is that some lenders won't provide finance for small units, often sized below 40 square metres, such as studios. But some provide a home loan for a studio. 

Find the loan and lender that are ideal for you. In NSW, home loans with principal and interest are available for loan amounts up to $350,000 and an LVR of 80% of the property value.

Before agreeing to a specific home loan programme, confirm that the conditions of the loan fit your demands and repayment capacity by speaking with your lender up front and reading the relevant loan documentation.

Are new apartments up to the job?

Your dream house has become a nightmare due to design and quality issues brought on by the recent increase in apartment construction.

However, planning is incorporating more livable laws tailored to people who want to live in the apartments they buy rather than rent them out in foreign countries and some Australian cities.

How can the new Australian dream of apartment ownership become exotic?

High-rise blocks give profits

Before the gap between the prices of attached and detached homes dramatically increased, the popularity of apartments in the Australian housing market had been increasing.

One occupied apartment was present at the time of the 2016 Census, compared to one for every five different residences in 1991.

While apartment living has benefits, experts point to the astronomical rise in house prices as the dominant force driving Australians into apartments. 

Statistics reveal that,

  • Sydney's typical home price has increased dramatically, doubling from $533,000 in December 2011 to $1.22 million in September 2021, while the median price of flats increased by the same amount, from $460,000 to $790,000.
  • Thanks to high-rise buildings, Australians now have a much wider variety of flats to choose from, which have proven profitable for property developers.
  • By 2016, more than 38% of the 463,000 inhabited apartments in Australia were located in high rises, compared to 18% of occupied apartments in buildings with four or more stories in 1996.

State governments have had difficulty enforcing regulations in the wake of the explosion in the apartment complex.

A pioneering gold standard for minimal room sizes and light sources was the SEPP65 apartment design requirements in NSW, which were established in the early 2000s.

The rigid regulations have influenced the unoriginal template-style high-rise generation.

However, Victoria took a while to adopt comparable requirements, eventually in 2017, which allowed an earlier wave of apartments to be built with an average size of 44 square metres and a reliance on "borrowed light" in bedrooms—where the single window is internal.


Typical design error

In his research on apartment living in Melbourne, Perth, London, and Barcelona, Prof. Ralph Horne, associate deputy vice-chancellor at RMIT's College of Design and Social Context, spoke with 250 families who reside in high-rise buildings.

In contrast to art deco blocks and smaller apartment buildings from earlier decades built with the foresight to allow restorations, he claims the engineering of many modern apartment complexes makes extensive renovations technically unfeasible.

Knowing your neighbours above, below, and to the side is a possibility. However, due to a lack of consideration in the design, many Melbourne residences that share balconies or other light sources block them out for privacy reasons.

Horne discovered that a common design problem in Australian residences was the inefficient use of space.

Most Australian apartments are rented out and owned by foreign investors, which maintains the disregard for sympathetic design.

Property Developments like Nightingale are non-profit sustainable developments focusing on common living areas. They never sell to real estate investors and only offer the house to those who intend to live there. 

The strategy reduces costs by avoiding real estate agencies and marketing expenses, two significant drivers of costs for other high-rise constructions.

However, in Australia, property developers may purchase more land than owner-occupier organizations.

Although families occupy more than 25% of apartments in Sydney, "there's still a view that an apartment is a transitional dwelling before buying a family house."

In Australia, the mental regulatory shift hasn't yet occurred, and there is a perception that "families with children don't belong in apartments."

Due to this, apartments are frequently not made with families in mind, which has significant effects when families do move in.

Yet, the apartment is the dream of the commoner in Australia now.


Why are apartments so popular?

Apartments are popular in Australia because they offer an affordable and convenient way to live in a major city. They're perfect for people who want to be close to the action but don't want the hassle or expense of owning their own home.

Apartments come in all shapes and sizes, so there's something for everyone. And with so many new developments popping up all the time, it's easy to find one that fits your needs and budget. Plus, apartments tend to be easier to keep clean and maintenance-free than houses, which is a big plus for busy people. So if you're looking for an affordable place to call home, an apartment is definitely worth considering.

Is it ok to live in an apartment forever?

It's perfectly fine to live in an apartment forever if that's what makes you happy. There are plenty of people who have made a lifelong commitment to living in smaller spaces and they love it! The key is to find an apartment that suits your needs and lifestyle and make it work for you.

There are tons of great apartments out there, so don't feel like you have to settle for one just because it's inexpensive or the right size. You can find an amazing place that feels like home if you're willing to put in the time and effort to find it. Keep looking until you find somewhere that you really fall in love with and then make it your own!

Which is the better apartment or house?

There is no one-size-fits-all answer to this question, as the best investment property will vary depending on your location and market conditions. However, in general, apartments are a better investment than houses, as they tend to appreciate in value more quickly and have lower maintenance costs. So if you're looking for a property that will give you a good return on your investment, an apartment is probably the way to go.

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