13 May 2021

Are more apartments good for Canberra?

| Karyn Starmer
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Apartment building under construction in Woden

The case for more apartments in the ACT is strong. Photo: Michelle Kroll.

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.”

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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.”

Vantage Strata managing director Chris Miller

Vantage Strata managing director Chris Miller. Photo: Michelle Kroll.

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.

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Of course the ACT government wants more and more apartments as they are only interested in how much money they can gouge from ACT residents.
More tiny shoebox apartments means more money per apartment handed over to the ACT government. This is all about the ACT government wanting and squeezing as much money as they can possibly get per metre of land.
Did you know the ACT government charges a HIGHER fixed charge on rates for apartments, than for houses? Why is that? Go read the revenue page on rates: https://www.revenue.act.gov.au
For residential land, a fixed charge of $773 applies
For residential units, a fixed charge of $808 applies

Generally speaking, apartments are not a very good purchase. As well as being very small, lack of privacy, shared spaces, little parking and few gardens, apartment strata fees are high and increase annually by large amounts as the property gets older (and things need to be fixed).

Mr Miller leaves out often significant body corporate fees when he says that maintenance costs are shared in apartments.
There may well be a need for more to live permanently in apartments but better regulation and more imagination around such permanency would help. Like real sound proofing, decent storage and decent sized balconies. People should be able to sit out in fresh air in privacy and to at least grow tomatoes in pots if they wish to. One apartment I know in a huge newish high rise in Tuggeranong lacks room inside for even a small table to eat at.
Where are the green areas for children to play in if families are to live for years in apartments and are not just smart young childless people looking for a vibrant lifestyle? How many provide a large room in the building for
cooped up children to go to play with other children from the building in bad weather, with room for things like a ping pong table and a small tramoline? How many provide an area for a community vegetable garden? Where are the trees for shade around many new apartment blocks in this city allegedly into planning for climate change? Masses of tall high rise apartments running air conditioners and clothes dryers cheek by jowl on almost treeless blocks doesn’t seem like a useful contribution to climate change mitigation. I think new blocks should also be kept to 4 stories high and a more human scale which at least Mr Miller’s mere “two dimensional” house offers. Sadly however the government seems much much keener on high turnover quick developer bucks and covering the city in tall ticky tacky boxes than it does in regulating for more quality of life for the long term for apartment residents of all kinds.

Capital Retro11:23 am 14 May 21

Saying more apartments would be good for Canberra is tantamount to saying General Custer needed more Indians.

With all due respect Chris Miller, I think you have been brain washed by this government. It is quite clear with the number of units not being sold, the poor quality and building defects that people don’t want apartments. The escalating prices of houses and town houses should be a very clear indication to this government what the community wants and they are making their choice even if it is at a price.

With concrete a substantial source of environmental warming gases I would think the ACT government would be all over this. No wait. What am I thinking?

How about Canberra developers start building apartments that are big enough and of a high enough quality to encourage mature homeowners to downsize!

Canberra is building the biggest houses in the world and amongst the smallest apartments in the world. Paradoxical.

Unfortunately property developers make a lot more money building tiny one bedroom apartments than the kind of apartments they build in European cities.

Amen to that BJ – not just for those wanting to downsize, but those people that may actually want to have families and stay in apartments that are suitably sized to do so – while I’m sure plenty want a detached home, I’m sure there are also plenty that would consider apartments if they were better sized and planned.

As you say though, the profit motive drives it all, and somehow (From somewhere) the demand for 1 and small 2 bed apartments seems insatiable almost. Without the draconian step of government stepping in (and probably making things worse as it often does), I fear we will never see a true mixture of apartments types and sized in the Canberra market.

The developers build what the market tells them too. If there wasn’t a demand for the units they are making, they wouldn’t be selling so fast.

The problem you’ve got is the people that want to live in bigger dwellings and can afford them, are the people driving the market for houses because they typically don’t want to live in apartments anyway.

The Neon Demon10:01 pm 14 May 21

Biggest houses in the world?? you are joking right. House are pathetic in Canberra.

Capital Retro3:54 pm 15 May 21

I’m trying to downsize and while there are very few single level dwellings available (the developers say it is all about something called plot-ratio) I have found a couple of suitable duplexes and villa-type townhouses.

Here’s the rub. These prospective dwellings are about the same price or more than the detached home I own so while I would be downsizing in size there is no financial reward for doing it.

If the government, who freely gives stamp duty concessions to a lot of first home buyers, would extend a total stamp duty exemption to aspiring downsizers like me it would help.

Two chances of that – Buckley’s and none.

Capital Retro,
The median price for apartments and townhouses is significantly less than for detached dwellings. So if the price of the downsizer properties you’re looking at is equal to or higher than your house, then you are clearly looking at newer, higher quality dwellings. Why should the government give you stamp duty relief?

In fact, once again, you should be a massive fan of the government’s Tax Reforms because they will greatly increase the ability of older people to downsize and result in no one paying stamp duty.

Capital Retro6:33 pm 16 May 21

I have no desire to spend the rest of my life in a poky little apartment with no windows in the kitchen or the bathrooms and a clothes dryer in a cupboard.

Also, because of a medical condition I have I can no longer climb stairs so I am forced to seek a single level duplex or town house and if one of these can be located the cost is about $1 million.

Please do some research before you blow off with your class warfare again.

Capital Retro,
I’ve done my research and the point I made is factual, you even admit it by talking about the fact you want a certain type of dwelling specific to your requirements, which is why the prices are so high. In reality, the median prices of those types of dwellings are significantly below that of detached houses.

You just aren’t willing to consider them because you want to compare apples with oranges to complain about some sort of made up unfairness in having to pay tax.

Chris Miller might just be a tad biased towards apartments. Where is the fact that most people would prefer to live in a separate house. Demand for separate houses is so high prices are being pushed up significantly due to lack of supply – who is going to build to meet that demand and where?

Not saying it isn’t true Nick, but is there any reasonable, valid research that has been done around housing preferences any time recently? Just intrigued to know what the actual profile for the community actually is – I sense its a bit of ‘hear say’ from both sides of the divide, saying one on hand people prefer houses, or the other they like diversity of choices.

Finally Relented1:29 pm 13 May 21

Apartment not for me. I’m a musician and wouldn’t put my neighbours through it. I like a proper garden to watch the birds come and bathe, and enjoy the flowers and smells of nature. For me, couldn’t think of much worse…(for housing…)

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