A recent report has found that buyers are looking for low-maintenance properties with great amenities and house-like proportions. The Rightsizing – Australian Prime Residential Insight 2020 report highlighted the fact that people are essentially looking for larger luxury apartments in prime suburbs throughout the country.
Rightsizing is appealing to a number of groups: families, entrepreneurs and ‘active retirees’ are the most common rightsizers, according to Knight Frank’s research, although it is becoming increasingly popular with younger generations due to their propensity towards transient and global work spaces.
The Knight Frank Head of Residential Research, Australia Michelle Ciesielski said: “From the apartment itself they desire high security and concierge for lock-up-and-leave, a reputable developer and builder with certainty of delivery, single-level, in-house amenities, a good view and aspect, access to transport links, a sense of community within the complex, smart living technology and a new modern building.”
The cost of the quarterly owner’s corporation levy and contribution to the growing sinking fund is often cited as a hurdle to rightsizing, but Knight Frank’s research found average quarterly costs for a 3-bedroom prime apartment (ranging from $3000 to $8000) were cheaper than the upkeep for a 3-bedroom house in a prime suburb ($9000 to $15,000).
Three key trends that Ms Ciesielski said to watch in the coming three years were the growing ‘active retired’ group, the improved global connectivity with direct flights to Australia increasing competition from international buyers seeking second homes and also the continuing undersupply of product.
Knight Frank’s research found the share of three-bedroom luxury apartments being built over the next three years falls for Sydney medium-density projects (to 44%), Sydney high-density projects (to 14%) and Melbourne high-density (to 21%).
The largest share of 3-bedroom apartments to be built in prime suburbs is in Brisbane medium-density projects (87%) whilst the largest growth in the share of 3-bedrooms being built is in Perth medium-density projects (from 27% to 50%). This large percentage of 3-bedroom apartments is a starc reminded of the change undergoing that market. The Brisbane market had been characterised for many years by an over supply of cheaper 1 and 2-bedroom investment apartments that had dragged the overall market down, In the past three years, the Gold Coast saw the highest portion of 3-bedrooms built, at 70% in medium-density projects, with this expected to rise even further to 81% by 2022. This may partly explain why Queensland has been so popular with downsizers and retirees over the last few years. Also also indicates a potential undersupply of 1 and 2-bedroom apartments emerging in the near future.