More Sydneysiders than ever before are choosing apartment living.
We explore what’s behind the trend and why an increasing number of locals are opting for apartments over traditional houses.
Sydney’s fashion for apartment living
Sydney is fast becoming a high-density city. According to the most recent Census data, apartments make up more than 30% of Sydney’s housing mix – up from 23.9% in 2001.
Here in the inner eastern suburbs, the proportion of apartments is far higher still. In Potts Point, they account for 88% of housing stock, and in Elizabeth Bay, it’s over 98%.
This trend towards apartment living is driven by a range of factors related to both supply and demand.
1. Growing population (and reduced land on which to build)
At the time of the 2001 Census, Greater Sydney’s population was 3.948 million. By the time of the 2021 Census, it had swelled to 5.231 million. That’s almost an extra 1.3 million people, each of whom needed somewhere to live.
While we’ve seen the development of new outer suburbs in Western and North-Western Sydney, the reality is that our city has limited places left to build (and not every new arrival wants a long commute). So, much of the development to accommodate our growing population has happened by ‘infilling’ areas and repurposing or redeveloping existing buildings.
In our local area, the last 20 years have seen some amazing new developments – many of which, such as The Hampton, The Rex and The Manor – have involved converting former hotels and entertainment venues into residential apartments.
2. Growing price gap between apartments and houses
One of the key trends we’ve witnessed over the past three or so years has been a widening gap between apartment and house prices.
Sydneywide, the apartment median house price is now $1,333,985, and the median apartment value is $817,059 – a gap of more than $683,000. In Potts Point, the gap is far wider still. The median apartment sells for $912,500, while no house has sold in Potts Point for less than $6 million in 2023, according to realestate.com.au.
The massive difference between the two property types is encouraging more people to consider apartment living. After all, it can give a buyer the opportunity to buy into an area they otherwise wouldn’t be able to afford.
3. Ability to live closer to the action
Much of the rise of apartment living, however, has nothing to do with price. Increasingly, we’re finding a lot of people want to be close to the action in the inner city. That’s especially true for downsizers, who have become a real driving force in our local property market.
With so few houses in this area, apartments are often the best way to do that.
By living in an apartment, you get the opportunity to enjoy the vibrancy and dynamism that comes from being at the centre of a global city. The wonderful cafes, restaurants, art galleries and entertainment venues become your backyard – but you also get some of Sydney’s best green spaces.
4. Better – and more varied – apartment stock
There was a time when apartments tended to be small and suited only to couples or individuals. That’s no longer the case. Increasingly, we’re seeing larger apartments with three or more bedrooms coming to market in newer developments, as well as a growing trend for penthouses. We’re also seeing renovations that are creating a lot more high-end and luxury apartments – and even apartment amalgamations.
This is opening up apartment living to a whole new range of buyers, including families – many of whom are choosing to live in apartments.
5. Changing lifestyles
Over the past few years, lifestyle has taken on a whole new importance, with many buyers prioritising it over everything else. And, for a lot of people, that lifestyle means moving to an apartment to free themselves from the chores and responsibilities associated with a big backyard. Apartments also now often come with amenities – including large swimming pools, gyms, saunas and even tennis courts – that you usually just don’t get in a family home. In fact, many newer ones have become almost like resorts.
Another change we’ve seen since the pandemic is a growing number of people moving to the regions for a more laid-back lifestyle but keeping a city crash pad. In our experience, these buyers almost always opt for apartments rather than houses.
6. A changed outlook
Finally, there has been a real mind-shift in Sydney over the last decade or so. As our city has grown, it has also become more cosmopolitan. The idyll of the home in the suburbs has been replaced with a desire to be in the heart of the city. We’re seeing many people choosing to give up their family home to live in apartments, even with school-aged children. It’s also becoming more acceptable than ever to live in an apartment for life.
As this happens, we expect to see more quality developments coming into our area to cater for a growing – and more discerning – market of apartment lovers.
If you’re interested in buying or selling in Potts Point and the eastern suburbs, contact my team today.