Multi-apartment developments continue to be the most popular dwelling type in Sydney new research has revealed. A report conducted by BIS Shrapnel for medium and high density dwellings from 2010 to 2015 indicates the pickup of new dwelling commencements in Sydney will maintain momentum in the coming years with all new dwelling types experiencing an upturn in construction. Robert Mellor, Director of BIS Shrapnel stated, “After peaking in 2003/04, the downturn in the residential market in Sydney saw new dwelling approvals across the city steadily fall to 50 year lows by 2008/09.” Mellor further states that “Affordability remained a constraint on owner occupier demand in this period, while the lack of price growth also deterred investors. “More recently, the Global Financial Crisis also limited development finance, which had a significant impact on other dwelling approvals, particularly high-density apartments in larger projects. This has served to further constrain new supply, with vacancy rates continuing to remain tight and push through further rental growth, setting the scene for the current upturn in construction. The pent up demand from the deficiency of dwelling stock, and an environment where economic growth is picking up and interest rates are stable over the next six months, is expected to see the upturn continue, with prices rising and construction increasing significantly across all dwelling types from the near-record lows of recent years.” “Despite the 50 to 64 and 65-plus age brackets having the fastest rate of population growth, they still have a high propensity to be living in detached houses. Nevertheless, their rate of occupancy of medium-density and high-density dwellings is rising, and we expect this group will become an increasingly important source of occupier demand for higher-density dwellings between 2011 and 2015, based purely on population growth.” BIS Shrapnel said compared to the other capital cities, detached house construction in Sydney will be less prevalent. After accounting for around 50 per cent of total dwelling activity in the 1990s, houses have comprised less than 40 per cent of total dwelling approvals in the last decade. Source: REBOnline - March 2011
