Empty nesters buy two units, get one key
Downsizing baby boomers are leading a trend towards bespoke apartments in upmarket developments.
Well-off boomers moving out of the family home are buying one- and two-bedroom apartments and merging them, particularly in Melbourne's inner-eastern suburbs.
But the bespoke option doesn't come cheaply, with prices starting above $1 million, developers say.
The Australian Bureau of Statistics' most recent survey of income and housing suggests the most common reason for empty nesters to move was to downsize, followed by a desire for a lifestyle change.
But the bureau also identifies the difficulty of downsizing within the same neighbourhood, particularly in Melbourne, Sydney, Brisbane and Adelaide. The scarcity of suitable smaller homes may be behind a shift in demand for apartments among older owner-occupiers.
Paul Hameister, of property developer Hamton, said a significant proportion - about 60 per cent - of its Sanctuary building in Richmond had sold to owner-occupiers.
Seven of the building's 193 apartments are three-bedroom units, but demand for larger apartments in the development's other buildings, Eden and Haven, outstripped supply, leading buyers to merge units, he said. Across Eden and Haven, 42 apartments had been merged, he said.
"There is an under-supply of owner-occupier three and four-bedroom apartments in Melbourne," Mr Hameister said.
He said merging apartments was a "niche" offering that required extra outlays on architects, fittings and fixtures, and local government planning approvals.
Few developers had the "appetite for the high-maintenance nature of dealing with a bespoke apartment", he added.
CBRE's Andrew Leoncelli said the demand for bespoke units was a sign that older people with more money were accepting apartments as a way of living.
"It's not about money, it's about getting the floor layout that suits them," Mr Leoncelli said. "We do it on nearly every project now where there are owner-occupiers, subject to the structural and service limitations of the design," he said.
The trend was particularly noticeable in Kew, Camberwell and Hawthorn, he said. "Blue-chip inner-ring suburbs will see a lot more of that."
In Hawthorn East's Averi development, six out of 31 apartments were merged. The option also proved popular in the upmarket 35 Spring Street development.
"In a lot of cases, people are buying them to downsize from the family home, and they see this as the place they're going to be for the next 20 years," Mr Hameister said about the Sanctuary building.