Units increase in popularity across the nation
Anyone considering purchasing an investment property in the near future should consider looking into medium density properties such as apartments, townhouses and semi-detached houses, as the latest Bankwest Housing Density Report has highlighted the nation's increasing demand for these property types over the last 12 months.
According to the report, 43.3 per cent of total new home approvals over the 12 month period to October 2013 were medium density dwellings - up from 39.8 per cent the year before. Bankwest Executive General Manager Mark Reid said this is one of the highest levels on record, suggesting the nation's overall market recovery is responding to the projected population increases expected in the coming years.
"Australians' appetite for medium density housing is steadily outstripping stand-alone homes. Smaller housing options continue to increase in popularity as the population grows and consolidates around Australia's capital cities," said Mr Reid in a February 18 statement.
"The increasing popularity of medium density housing is possibly being driven by Australia's first time home buyers, who are finding it difficult to afford a stand-alone house."
According to data release by Bankwest, units are a much cheaper option for first home buyers to secure for themselves. Saving up a 20 per cent deposit for a unit takes first home buyers an average of 3.4 years, while saving for a detached home takes 4.2 years. This is a considerable difference between the two types of properties and may provide first time buyers with an idea of which houses for sale they should look for.
Furthermore, capital cities accounted for 87.1 per cent of the growth in medium density properties across Australia, while regional areas were responsible for the remaining 12.9 per cent. In five of the major cities across Australia, medium dwelling approvals were responsible for over half the approvals seen over that 12 month period.
For example, Sydney (68.3 per cent) measured the highest proportion followed by Canberra (68 per cent), Darwin (67.9 per cent), Melbourne (54.6 per cent) and Brisbane (53.4 per cent).
The Australian Capital Territory is leading the national growth for medium density dwelling growth, posting an increase of 82.7 per cent for the 12 month period ending October 2013. Following this, Queensland saw the next highest increase over the same period (53.5 per cent), followed by South Australia (43.4 per cent).
Anyone considering purchasing investment property in Australia could do well to consider units or off the plan apartments in these cities. Not only has the popularity of these dwellings increased, but the projected population boom will help to provide tenants and potential buyers in the coming years.