Apartments outperform houses

In the past, if you were looking for a good property investment, houses were the only game in town. The security of houses even coined a phrase: As safe as houses.

But times have changed.

Data from CoreLogic shows that growth in apartment values climbed higher than that of houses across 39 per cent of all suburbs nationwide in the first half of 2023. ¹

In Sydney, apartment price growth surpassed house growth in almost a quarter of all Sydney suburbs examined by CoreLogic.

And the share of suburbs where apartment values have grown faster than houses could become even greater in the future.

Tim Lawless, CoreLogic Research Director, says research has shown a clear shift in demand for apartments, which are also beginning to enjoy a larger share of the market for stronger capital gains compared with houses, with demand being driven by higher interest rates and the rising cost of living.

“I think more people, particularly first-home buyers looking to exit the rental market, are quite attracted to the medium to high-density sector because of the more affordable price points,” he said.

“At the same time, the medium- to high-density sector is undersupplied, and it looks like it’s going to get worse over the next couple of years because we’re not seeing the early stages of a supply response and approvals just yet.”

The joys of apartment living

A  similar report by property research firm Hotspotting found that apartments are outperforming standalone houses when it comes to investments, with New South Wales being one of the top locations for the next six months. ²

Hotspotting director Terry Ryder says apartments are outperforming houses in several ways, including, faster growth in rents, higher capital growth, and a growing share in new dwelling approvals.

“It’s not just about affordability – although that plays a big role in our largest cities. Our population is simply embracing apartment living more because of the opportunity to reside in more desirable locations as well as having easy access to lifestyle precincts,” he said.

“Developers have also been constructing more owner-occupier stock, such as three- and four-bedroom apartments, as well as offering superior resident facilities such as rooftop and BBQ areas, infinity pools and spas, private dining rooms, and even the complimentary use of vehicles.”

Apartments have long appealed to investors because of their historically higher yields and popularity with tenants. Now these same apartments are also outpacing houses when it comes to both rental and capital growth.

“We have significant numbers of downsizers active in the market, as well as hundreds of thousands of overseas migrants arriving on our shores, with many of them coming from cities where apartment living is the norm,” Mr Ryder said.

“All of these factors point towards a solid future for apartments that are designed and built to be long-term homes of first choice for tenants and owner-occupiers alike.”

The ALAND difference

ALAND has forged a reputation over the past two decades for building quality apartments at an attainable price. ALAND apartments are always designed to keep ongoing maintenance costs as low as possible, making them an excellent choice for owner-occupiers and investors alike.

Currently, ALAND has 1,200 units under construction and a further 6,000 units awaiting approval, with major developments underway in St Marys, Schofields, Merrylands, Harris Park and the NSW Central Coast.

With over 20 years in the building industry, ALAND has an impeccable record of completing projects on time and on budget – and creating new, masterplanned communities that appeal to singles, couples, families, and downsizers.

To explore ALAND’s current portfolio of residential developments please click here or call our professional sales team on 1800 025 263.

Sources:
1 The Australian Financial Review
2 Build Australia