Australia's change of heart

8 years ago
5 minutes

For decades, Australia has dipped its brow at apartment living, unknowingly writing off an economical and affordable living option; but why has it taken us so long to change our minds?

Following World War II, a global battle that scarred almost all areas of the globe, Australia, a nation of only 8 million people, was left contemplating what the consequences of this world-wide war would truly be.

Despite victory in both Europe and Asia, the damage had already been done; it was here, that Australia dug deep and decided to prioritise a national objective, a goal that eventually became the Australian dream.

Fast forward half a century to 2016, and Australia is a very different place, with very different experiences.

Since World War II, Australia has hosted the Olympics…twice, struck uranium deposits, found copious amounts of oil, and somehow avoided the Global Financial Crisis; all the while building a strong and buoyant real estate market that jumps from strength to strength.

Underneath all that, Australia has globalised, and opened its eyes to the ways of Europe, America and Asia, encouraging its citizens to broaden their approach to life, and in our case, real estate.

With tens of thousands of apartments being built each year, there is no doubt that Australia has embraced apartment living on the East coast.

Whilst international cities like New York, Paris and Hong Kong have relied on affordable inner-city living for decades, Australia, and particularly Melbourne, has taken much longer to get there.

“Obviously there has been a massive sea-change in the last 10-15 years in both interest and appetite from both developers and purchasers for apartment style living,” says Minister for Planning Richard Wynne.

“If we go back to the early 1990s, I was down at the Melbourne Town Hall then, when we talked about people living in the CBD, there was no one living in the city - there was maybe 100 people who resided there.

“The most recent building starts speak to the enormous demand for apartment style living, with 35% of all starts, being apartments. It really is amazing. “

So the question remains, why has the change of one word to another, made such a dramatic difference?

“The 2000 Summer Olympic Games put Sydney, and Australia, in the international spotlight and lifted investor demand for inner Sydney residential units,” said Barry Hyland, who was one of Australia’s pioneer public relations consultants in property publicity.

“There is no doubt that intensive marketing helped alert people to the benefits of apartment living.”

Whilst marketers must be responsible for the change in perception, in reality, it seems that the quality of the apartments being built, combined with the stability of the location and the market have made the real difference.

“Inner city living is becoming more appealing to young Australians as they are willing to compromise on size for location by moving closer towards the central epicentre of Melbourne,” said Tim Storey, Managing Director of Colliers International Residential.

“In Melbourne we are lucky to have so many large open public spaces coupled with world famous food cultures and entertaining precincts allowing people to embrace the low maintenance lifestyle without the upkeep of a large backyard in the outer suburbs and dependence on a car to travel to their favourite café or restaurant.”

Australia’s market is the rock-solid base for the recent prosperity, but historically, it hasn’t always come this easy.

“Combined with historically low levels of debt and cost of debt, a great recipe has formed, a recipe whereby the land of homes grow and grow at a significant rate,” said Andrew Leoncelli, Managing Director of CBRE Residential Projects.

“What’s that got to do with apartments? It makes houses completely out of reach for many generations of people. It means that apartments become the only affordable alternative if you want to live in a good location.

“The premise of apartments works best when you go into the most expensive suburb possible, and nobody can afford the houses. The downsizers can buy an apartment off-the-plan with a third of what the house is worth.”

So whilst the Australian Dream served as an important cultural goal for Australians after the devastating results of a global war, today, after 50 years, we have not only rebuilt, but redefined ourselves as a country.

The change in terminology from ‘unit’ to ‘residence’ comes not only out of international influence, but through local respect to both the market and the developers.