Insights

The changing face of apartment living

Posted July 20, 2017

Author(s):

Julian Szafraniec

Sectors:

Housing

SGS Economics and Planning Changing face of apartment living

Census data shows that Australians are shifting to a more compact and cosmopolitan lifestyle.

Australia’s economy is continuing to shift towards a knowledge-based services economy concentrated in the centre of our big cities. At SGS, we often talk about this economic phenomenon that has driven a resurgence in compact living as people trade large houses on big blocks for better access to transport, jobs, services and amenities.

This phenomenon has contributed to skyrocketing house prices and increased infill development in major cities as people strive to live close to new economic hubs. Despite this, apartment living is often thought of as being best suited to students, young professionals and single-family households. For many Australians, the prevailing view is that if you have children, you will want to settle down in a detached house in the middle or outer suburbs.

However, from a global perspective, the ‘quarter acre block’ is a strange concept. In many European and Asian cities, it is commonplace for families with children to live in more compact housing. The latest Census data highlights how Australia is beginning to witness a shift towards a more compact, cosmopolitan way of life.

There are several reasons for this shift:

High house prices are making purchasing a detached house increasingly tricky, and those that are affordable are typically further away from good job opportunities and services.
It is now commonplace for family households with two parents to have both parents working, which creates a ‘spatial leash’ compelling working parents to live as close as possible to where they work.
Preferences are shifting, and the detached suburban home is not necessarily the ‘great Australian dream’. People are busier than ever, and a big house on a large lot means more upkeep. People are eating out more, participating in more cultural activities and drawing on more health and community services. As a result, families are trading private space for better access.

The 2011 census reveals 50,000 families with children [1] lived in high rise apartments [2] across Australia. In 2016, this increased to 79,000 families, a 56 per cent jump in five years.

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What we found

Most apartments are in Australia’s capital cities, particularly in Sydney and Melbourne. All cities have experienced an increase in the absolute number of families with children living in apartments, with an increase in the proportion of families in apartment households.

Typically, families with children prefer areas surrounding the CBD rather than within the CBD. This is likely due to good access to jobs, lower urban form and access to parks and other local community facilities. However, this is not consistent across cities.

Sydney

In Sydney, we see that it has the most substantial proportion of apartments occupied by families with children at 25 per cent in 2016 (up from 22 per cent in 2011). It also had the largest increase with 18,600 new high rise apartments occupied by families with children in 2016. There are several areas, including North Sydney, Parramatta, and the inner south-western suburbs, that are very popular for families with children living in apartments. These locations are attractive to families for many reasons, including the types of apartments available, better relative affordability (compared to detached houses) and access to employment hubs.

Melbourne

In Melbourne, we see that there has been a slight decrease in the proportion of apartments occupied by families with children, from 14 per cent to 12 per cent, while the actual number has increased by 4,200 dwellings. This change is possibly due to the significant number of smaller apartments developed in the city core, and an increasing number of unoccupied dwellings in the city centre. The number of families living in apartments in the CBD and Docklands doubled between 2011 and 2016. Areas located further from the CBD have seen less of an increase and in some cases a decrease, in families living in apartments, likely due to alternative compact options available such as townhouses.

Brisbane

In Brisbane, there are over 4,500 high rise apartments occupied by families with children in 2016, almost double since 2011. Over 70 per cent of these apartments are located in the inner city, highlighting the preference for inner-city areas for families living in apartments. Overall there was a marginal increase in the proportion of apartments occupied by families with children since 2011, to almost 14 per cent in 2016. Interestingly, Brisbane has a greater proportion of apartments occupied by families with children than compared to Melbourne, Adelaide and Perth.

Perth

In Perth, there are 2,000 high rise apartments occupied by families with children in 2016, comprising 12 per cent of all apartments in the city (up from 11 per cent in 2011). Over 60 per cent of these are in inner Perth, with other popular areas being the south-east and southwestern suburbs.

Adelaide

In Adelaide, we see that there has been an increase in the proportion of apartments occupied by families with children, at 11 per cent in 2016 (up from 9 per cent in 2011). Over half of these are in Adelaide Central and Hills.

Darwin

In Darwin, we see that there has been a robust increase in the proportion of apartments occupied by families with children, at 21 per cent in 2016 (up from 17 per cent in 2011). The total number of high rise apartments in Darwin has doubled since 2011, with one-quarter occupied by families with children.

Hobart

In Hobart, there has been a drop in the proportion of apartments occupied by families with children. But there is a very small number of apartments in Hobart, with only 50 units occupied by families with children (out of 600 high rise apartments in 2016).

An important role to play

The 2016 Census data reveals that Australian families are slowly adapting to changes in the urban economy. Policymakers and strategic planners need to ensure housing options meet the needs of households.

We applaud policies like Better Apartments Design Standards (BADS) in Victoria and the NSW State Environmental Planning Policy No 65 - Design Quality of Residential Apartment Development (SEPP 65) for helping cities like Melbourne and Sydney provide adequate housing options for a variety of lifestyles to improve the quality of life for families in cities across Australia.

It is also critical to provide the supporting infrastructure and services for this growth. Innovative approaches to planning this future demand are required to ensure long term sustainable urban development.

[1] Families with children have been defined as all family households with children including couples and one parent families.

[2] High rise apartments have been defined as a flat or apartment in a four or more storey block

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Author(s):

Julian Szafraniec

Sectors: