Demand for inner-city dwellings has driven an apartment boom on both sides of the Tasman but the coronavirus pandemic could put a temporary halt on the great urban squeeze, a study has found.
One-fifth of Australians and one in 20 New Zealanders live in strata-titled properties, with the number of apartments increasing in both countries over the past decade.
There are about three million strata and community-titled properties across Australia, growing in insured value by $100 million in the past two years to around $1.1 trillion, according to the Australasian Strata Insights report by the University of NSW.
Hazel Easthope, lead researcher at the university's City Futures Research Centre, says strata titles quickly spread across the country after they were introduced in NSW almost 60 years ago.
By 2015, the number of new apartment dwellings overtook new detached housing builds in Australia, remaining roughly equal for three to four years before a recent dip.
"This increase reflects the population growth, especially pronounced in the larger urban areas of both countries, as well as government policies to promote urban consolidation - that is, building up, rather than out - within existing urban areas," Associate Professor Easthope said.
About 43 per cent of Australians choosing to live in apartments were born overseas, and half are renters between 20 and 39 years of age.
Prof Easthope says much of the growth comes from a rapid rise in approvals for apartment buildings with four or more storeys in NSW, Victoria and Queensland.
But she expects growth in new apartment builds will slow in response to the impact of COVID-19 on migration and the economy.
The report mentions recent analysis by real estate services provider JLL which predicts a shorter supply of apartments until 2023.
"However, so long as the twin policy drivers of population growth supported by migration and urban consolidation in existing areas continue, we can expect strata developments to play an important role in urban development for many years to come," Prof Easthope said.
Australian Associated Press