Now we opt for the high life
Our tastes in housing are changing, with more Australians embracing high-rise living, writes Alice Archer.
The great Australian dream of home ownership is changing form as more Australians turn to high-rise living.
The latest research by industry analysts IBISWorld shows fewer Australians are buying their own home and the homes they are buying are getting smaller. IBISWorld analyst Tim Stephen says there is a trend towards higher density living as housing becomes less affordable.
"We expect this trend to continue as more people sacrifice size for lifestyle," he says. "Our research shows more Australians want to live in the city - close to entertainment, work and education - but because space is at a premium, more people are choosing to live in apartments as opposed to houses.
"Home ownership is the cornerstone of the great Australian dream, providing financial and emotional security for those who can afford to take the plunge. But fewer people can afford to buy their own home and unless the governments do something about it, affordability will become more of an issue."
And while the house construction market is picking up pace this year, it is expected to slow again.
"The house construction industry's revenue is forecast at $39.5 billion for 2012-13, an increase of 1.3 per cent on the previous year," says Stephen. "New housing investment is gradually recovering under the pressure of pent-up demand for accommodation and lower mortgage interest rates. However, this growth is predicted to slow as interest rates rise and housing becomes less affordable."
High-density housing is growing at a faster rate than the traditional, detached housing sector, he says. "Apartment and townhouse construction is worth $15.1 billion for 2012-13, an increase of 5 per cent on the previous year. More Australians are buying higher density dwellings as inner-city detached housing becomes less affordable.
"Over the next five years, we forecast the apartment and townhouse construction industry to grow at 4.5 per cent compared with just 2.4 per cent in the detached house construction industry."
Stephen says the number of people per dwelling is also dropping.
"The long-term trend for the number of people per dwelling is declining and this is also having an affect on the size of properties people are buying. They don't need as much space."
Supply is another issue. "As the supply of houses has been constrained over the past decade, prices have increased and more people are being forced out of the market," he says. "They are either renting or buying something smaller such as an apartment.
"Land which is being released for new housing is typically quite a distance from the CBD, and sometimes the infrastructure lags behind. A lot of people prefer to buy a smaller house or apartment that is closer to the city and therefore closer to employment, education and shopping."
He says Australians are getting used to living with less space. "Australian cities are becoming more like European and North American cities and people are getting used to higher density living."
"If you look at the rate of construction of new apartment buildings over the past decade, it has certainly outgrown construction of new houses."