The number of apartments in capital cities rose as much as 36 per cent since 2012, a new report from the Reserve Bank of Australia stated.
In Sydney alone, apartment quantity has risen by almost 20 per cent since 2012, with units last year accounting for one-third of all residential building approvals. Brisbane has an even higher number at 36 per cent, followed by Melbourne at 30 per cent and Perth at 20 per cent.
“The strong volume of apartment construction has made a significant contribution to economic growth and employment,” wrote Michael Shoory, the author of the report titled, ‘The Growth of Apartment Construction in Australia.’
“The majority of the new apartments have been built in the most populous cities and primarily near inner-city areas or close to transport infrastructure. The increase in apartment construction has delivered many dwellings that are less expensive than larger, lower-density housing… mostly in areas that are well-connected with amenities and employment centres.”
Sydney, Melbourne, and Brisbane account for more than three-quarters of all apartment approvals since 2011. Sydney had building approvals for 78,000 apartments from 2012 to 2015, while Melbourne had 68,000 and Brisbane had 30,000.
The sharp increase in apartment approvals has also increased site prices as competition intensified between developers. Apartment demand was driven by population growth, higher prices for houses and land, and an appetite for living closer to work and lifestyle amenities.
The Reserve Bank also predicts a strong demand for apartments in the future. According to the report, “Apartments are likely to continue to play an important role in providing new housing as land supply constraints motivate prospective home owners to purchase higher density dwellings.”
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