As Canberra’s skies continue to fill with cranes, and whole town centres such as Woden and Belconnen are renewed, it would seem prudent to question if there are simply too many apartments being built in the capital. And with a shortage of houses on the market causing properties to sell for higher prices than expected – often before they hit the market – there is strong evidence of demand for more housing in the ACT.
According to the latest data from CoreLogic, in the past year home prices have jumped 12 per cent to a median value of $727,032. The pressure is also high in the rental market with the latest data from SQM Research showing only 508 vacancies in Canberra at a rate of just 0.7 per cent, in March 2021.
The ACT clearly needs more properties to meet increasing demand as expanding generations of Canberrans stay in the region, and more people choose to move to the capital for employment opportunities and the less crowded lifestyle compared to other Australian cities. But is the constant building of apartment blocks the answer to a dwindling housing supply?
Vantage Strata managing director Chris Miller says apartments, previously seen as a compromise option to living in a house, are set to play an important part in the solution to the ACT’s housing crisis.
“Apartments were previously seen as an inferior option, suited to people who could not afford to buy a house, but that is not true anymore,” he says.
“The benefits of apartment living are enormous. Motivated by location, lifestyle and convenience, people are now choosing to live in apartments.”
Areas currently experiencing the biggest growth in apartments are urban locales around Civic, Kingston, Dickson, Belconnen and Woden that are filled with cafes, restaurants, shops and extensive networks of parks and paths nearby to lure people out of their houses and away from the upkeep of their property.
“There are good reasons why downsizers move into apartments,” says Chris. “If you want to be mobile, apartment living is perfect.”
According to figures provided by Strata Community Australia ACT, there are approximately 26,000 apartments due to come onto the market in the next five years. These include sites that have been sold, are with a development application or are under construction. It does not include sites yet to be released.
Chris says the current demand for new properties is at around 5000 per year and estimates 70 per cent of that demand is met by strata properties.
“The 26,000 apartments to come in the next five years are only just keeping up with current demand levels,” he says. “Any predictions of a future oversupply are likely to be incorrect. Developers believe they are reading the market correctly.”
Chris argues the case for more apartments in Canberra is strong.
“We have a critical housing affordability problem in the ACT and strata is the most efficient and affordable way to addressing this crisis,” he says.
“With a smaller footprint, higher density housing is definitely a more efficient use of space. Apartments are affordable for buyers and renters – the cost of purchase is more efficient, rates and charges are lower, and maintenance is shared.
“You can live in a 100-square-metre apartment, in a block with other residents, close to a vibrant, urban lifestyle, or choose to live in a larger home and occupy an entire block of land in a two-dimensional house. You can house the equivalent of a whole old Canberra suburb in a modern, medium-density development.”
Vantage Strata provides strata, facilities and onsite building management services in the ACT and NSW.