As urban landscapes evolve, apartment living has become increasingly prevalent in New South Wales (NSW), shaping the state's housing landscape. According to the Australasian Strata Insights 2022 Report by UNSW City Futures Research Centre, based on 2021 Census data, nearly 1.3 million residents in NSW call apartments home, residing in diverse communities across 89,049 strata schemes. This surge in apartment living reflects the evolving preferences and lifestyles of NSW residents, with urban centres becoming hubs of convenience, diversity, and opportunity.
Diverse Communities and Lifestyle Appeal
One of the most striking aspects of apartment living in NSW is the diversity within these communities. With residents from various cultural backgrounds, apartment living epitomises the multicultural essence of NSW. From Australian-born individuals (41%) to those hailing from China (second largest cohort - 7%), linguistic diversity further enriches these communities, with English and Mandarin being the dominant languages spoken at home. Beyond diversity, the popularity of apartment living can be attributed to its lifestyle benefits, offering convenience, low maintenance, and access to shared amenities.
Children Live in Apartments
Contrary to misconceptions, apartments are not just for singles or couples without children. In fact, families make up a significant portion of apartment residents in NSW. While couples without children and lone individuals comprise a notable percentage, 17% of apartment residents are couples with children, and 7% are single parent households. That means approximately one in four apartment households have children living in them. With amenities catering to families and a supportive community atmosphere, apartments are far from being the poor cousins' setting for raising children.
Youthful Demographics
While apartment living undoubtedly appeals to downsizers and empty nesters seeking a lock-up-and-leave lifestyle with minimal maintenance, the demographics of apartment residents in NSW paint a different picture. Surprisingly, the over 60s demographic only constitutes 15% of all apartment residents. Instead, the largest cohort, comprising 47% of apartment dwellers, falls within the 20-39 age bracket. This trend highlights the broad appeal of apartment living among younger demographics, who are drawn to the convenience, affordability, and vibrant urban lifestyle that apartments offer.
Renting Reigns
The data highlights a surprising yet concerning fact: 15% of apartments are categorised as unoccupied. While this could be due to reasons like seasonal vacancies or properties undergoing renovation or awaiting sale, it underscores the need for policies that encourage occupancy, particularly given the current shortage of housing supply. Additionally, the significant proportion of rented apartments, at 48%, may shed light on the severity of the housing affordability crisis, particularly in Sydney.
Opportunities and Challenges Ahead
Looking to the future, apartment living in NSW presents a myriad of opportunities and challenges. The increasing demand for higher-density housing underscores the need for sustainable urban planning strategies that prioritise affordability, infrastructure development, and community resilience.
However, the supply of new apartments faces challenges, with approvals and commencements experiencing a notable downturn in recent years. The UDIA Apartment Supply Pipeline Report 2022 reveals a concerning trend in NSW. In FY22, the number of newly completed apartments fell significantly below both the 5-year and 10-year averages, with only 12,600 completions, down from a peak of 31,700 in 2018-19. The approval of new apartments has also seen a downturn since 2020, reaching record lows in 2022. Despite a slight uptick in approvals in August/September, they remain 66% below the peak observed in 2016.
This decline in approvals has led to a decrease in commencements, down by 23% between March and June quarters. Furthermore, a substantial number of approved projects are yet to commence, highlighting challenges in the NSW apartment market and suggesting a significant gap in new apartment supply by 2025-26. These trends emphasise the importance of addressing supply shortages to meet the growing demand for apartment living in NSW.
Future of Apartment Living
Despite the challenges, the future of apartment living in NSW is bright and promising. As demand continues to rise, stakeholders must collaborate to address supply shortages, foster sustainable growth, and create vibrant, inclusive communities. At Compass Strata, we are committed to supporting the evolution of apartment living in NSW, providing innovative strata management solutions that enhance the living experience for residents and contribute to the thriving communities of tomorrow. Join us in shaping the future of apartment living in NSW!
