When small is better
Sydney is well on target to becoming the first Australian capital city to reach five million people, according to the Australian Bureau of Statistics (ABS) – a development that will put even further pressure on housing demand and home values. Home prices in Sydney jumped 9.1% in the year ending July 2016 and according to Demographia’s annual survey of property markets in eight countries, Sydney is the second least affordable city in the world, with Sydneysiders spending 12.2 times their income on a home.
Is the answer a ‘tiny house’?
It’s not surprising that people are looking for other options when the great Aussie dream of owning a big home with a picket fence on a quarter-acre block is so far out of each. Some people are embracing what’s called the “tiny house movement”.
Tiny houses of all shapes and forms are emerging across the globe, partly spurred on by TV programs such as Tiny House Nation and Tiny House Australia, as people seek freedom from heavy rents or mortgages and look to simplify their lives. Another factor fuelling this trend is environmentalism and a desire to conserve energy.
Small but not that small
Tiny houses are unlikely to become mainstream, but smaller apartment living is certainly on the rise. With property prices surging and Sydneysiders preferring to live close to transport, their places of work, shops and restaurants, builders, limited geographically by Sydney’s harbour and parklands, are going “vertical”. A case in point is the planned 90-storey Aspire Tower in Parramatta, which is set to become New South Wales’ largest apartment development.
BIS Shrapnel says building commenced on a record 19,450 apartment dwellings in Sydney in 2014/15, up from 8,300 four years earlier. And, according to 2015 McCrindle research, 28% of Sydney’s population now lives in high density housing while 13% live in medium density housing.
“As the nation grows…the focus turns to the quality of life that can be achieved in higher density housing,” observes McCrindle Research Principal Mark McCrindle. “High and medium density dwellings are now being built at almost twice the rate of stand-alone houses in Sydney with 29,127 building approvals for dwellings other than houses in the period 2014/15, compared to 14,656 standalone housing approvals for the same period.”
Watch this space
McCrindle’s research found that one in two Sydneysiders who had never lived in an apartment would consider living in one. In addition, Generation Y (63%) and baby boomers (53%) were the Sydneysiders most open to trying apartment living for the first time, compared to Generation X (41%).
Smaller unit living is also likely to expand with a rise in single-person households. According to the ABS, lone person households will grow the fastest in coming years, increasing by roughly 63% by 2036. This is largely a result of changes in the age structure of the population and the fact that older women in particular are more inclined to live alone . But while Sydneysiders may be downsizing, apartments will not be getting smaller with the NSW government recently slapping a minimum size on new studios of 35 square metres.