Recent research by Hotspotting revealed a significant trend: more homebuyers and investors are choosing apartments, townhouses, and units as their preferred type of dwelling – a shift that is pushing up sales volumes and prices in various strategic locations nationwide.
“Buyer demand in locations where units dominate the dwelling mix – or are a significant part of the dwelling mix – has been rising notably for the past 12 months,” said Terry Ryder (pictured above), director of Hotspotting. “In fact, our research shows that suburbs where units dominate the dwelling mix are now among the most powerful markets in Australia.”
The Hotspotting National Top 10 Apartment Hotspots Report highlighted diverse buyer demographics contributing to the surge, including downsizers, first-time home buyers, lifestyle seekers, and international migrants accustomed to unit-style living.
“We are also seeing lifestyle buyers seeking low-maintenance, lock-up-and-leave options in good locations,” said Tim Graham, general manager of Hotspotting.
Graham also noted the growing appeal of apartments among younger buyers looking for an affordable entry into the property market and investors drawn by high rental yields and affordability.
The preference for apartments is not just a matter of choice but also an economic decision.
“At Southport on the Gold Coast, for example, apartments are considerably cheaper than houses, sell faster, have higher rental yields, have recorded bigger price growth in the past year – and the long-term capital growth rate is close to 10% per year,” Ryder said.
This pattern of apartments outperforming houses in terms of price growth is evident across Australia, making them a compelling option for a wide range of buyers.
With apartment sales gaining momentum, especially in New South Wales and Greater Sydney, the market is expected to become more competitive. Nearly half of the property sales in New South Wales in the last quarter were apartments, with similar surges in Brisbane.
“With a shortage of supply and several developers moving toward build-to-rent projects, rather than build-to-sell, demand for apartments is expected to become even more competitive, further driving up prices,” Graham said.
The low supply of new apartment stock, coupled with ongoing challenges in construction, suggests that this trend towards apartment living is likely to continue and intensify.
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Hotspotting's Top 10 Apartment Hotspots include Bowen Hills and Clayfield in Brisbane, QLD; Henley Beach in Charles Sturt, SA; Golden Beach on the Sunshine Coast, QLD; Hawthorn in Borooondara, VIC; Kingston in inner-city Canberra; Newtown in inner-west Sydney, NSW; Southport in the Gold Coast, QLD; Tweed Heads in Tweed Shire, NSW; and Westmead in Parramatta, NSW.
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