Apartments are rapidly becoming the dwelling of choice for a majority of people in some of the key locations across the nation.
More and more people are opting to buy apartments and other types of attached dwellings because of the low maintenance lifestyle and/or the lower buy-in prices.
Right now, the strongest markets in our biggest cities are the inner-city areas where apartments dominate the residential real estate scene.
All this is graphically illustrated in the new Spring 2023 edition of The Price Predictor Index, which analyses buyer demand for all the major suburbs and towns across Australia.
This report finds that the strongest market precinct in the Greater Sydney area, right now, is the City of Sydney LGA, which encompasses the Sydney CBD and near-City suburbs like Potts Point, Elizabeth Bay and Darlinghurst.
Indeed, we rank the City of Sydney as our National Growth Star, the strongest municipality for buyer demand in Australia.
Close behind is the equivalent municipality in the Greater Melbourne area, which is the City of Melbourne LGA. This includes the Melbourne CBD and near-City suburbs like East Melbourne, West Melbourne and Docklands.
This is the busiest market in the Greater Melbourne area – and we also note in the Price Predictor Index that the neighbouring City of Yarra, which includes suburbs like Fitzroy and Collingwood, is also a very strong market with high buyer demand – dominated by apartments, units and townhouses.
We see similar patterns of strong sales activity in apartment precincts in the inner-city areas of Brisbane, Hobart and Perth.
The trend of higher demand for apartments is also seen further afield, particularly in the Greater Sydney market in municipalities such as the Inner West, Canterbury-Bankstown, Ryde and Parramatta.
It’s also seen in some of the regional markets, notable iconic coastal cities like the Gold Coast and the Sunshine Coast in Queensland.
We first identified this trend in 2022 but it has become increasingly visible throughout 2023.
And we think it means that one of the dominant paradigms of real estate is being challenged – the one that says that houses on land always grow in value MORE than do apartments with their minimal land content.
Our research for the Price Predictor Index Spring edition identified many suburbs in Sydney, Melbourne and Brisbane where the median house price has decreased recently but the median apartment price has risen.
It’s an important trend and one that’s being driven by different cohorts in the market – including first-home buyers and older people downsizing.
Those who want to buy in our major cities but can’t afford houses in their location of choice might want to consider the growing possibilities of investing for future capital gains and good rental returns in the area’s apartment market.
The Spring 2023 edition of The Price Predictor Index is the most optimistic quarterly edition since 2021, following 18 months in which many markets struggled and sales activity steadily declined.
So get yourself a copy of The Price Predictor Index. It’s a great way to be informed about individual markets right across Australia – and their prospects for 2023 and beyond.