Stockland, Australia’s largest listed residential developer, has revealed plans to “dynamically reshape” its property portfolio by increasing its exposure to apartments over the next five years.
“We think the apartment sector has the potential to outperform the established market over the medium term,” said Stockland Chief Executive of Communities Andrew Whitson to The Urban Developer.
He continued, “We’re looking at a number of opportunities at the moment, predominantly in Sydney and Melbourne, and we think now is the right time to start to build that pipeline progressively.”
The company’s decision to grow its apartment stock and unlock mixed-use properties aims to capitalise on the return of pre-Covid immigration levels and the price disparity between apartments and traditional detached housing.
CoreLogic data shows that traditional detached house prices have skyrocketed in the east coast capital cities with some increasing by over 20%. While apartment and townhome prices have also risen, they remain the more affordable option for many purchasers - particularly first home buyers. The difference between detached house and apartment prices across Australia’s capital cities is 37.9% - the widest on record.
Colliers data indicates that in Brisbane - where the property market has been spurred on by interstate migration and the 2032 Olympics - the median detached housing price is currently 82% higher than the median attached housing price. “From an apartment perspective, it looks like a really strong proposition at the moment,” says Brendan Hogan, Colliers Residential Director.
Whiton also commented, “We think urbanisation is going to continue to be a strong theme, particularly as you get migrants returning and particularly when you look at settlement patterns across our cities and where government policy is pushing new housing.”
“The only way to accommodate population growth is going to be through densification in the inner and middle rings… and if you want to be a player somewhere like greater Sydney, you’re going to have to be prepared to develop at density, so that pushes you into build-to-sell and build-to-rent apartments.”