The number of apartment buildings being constructed in Australia has risen at a faster pace than the figure for new semi-detached and detached residences, new figures show.
Data published by the Reserve Bank of Australia (RBA) shows that apartments accounted for the lowest number of new homes built in the country in the early 1990s, but their growth has since surpassed that of semi-detached houses, with over 60,000 apartments springing up across the property market in 2016. In contrast, fewer than 50,000 new semi-detached dwellings were built.
Although the number of detached homes constructed last year was greater than all other property types, with approximately 115,000 built in 2016, the new figures demonstrate that the apartment sector is an emerging area of the Australian market for property investors from all over the world to pay attention to.
The significant rise in apartment construction over the past decade is primarily being attributed to their low building cost in comparison to other types of home. According to data from the RBA, flats are on average 30 per cent cheaper to build than detached properties, with the bank also believing that changes to people's lifestyles are driving up demand for apartments, fuelling their growth.
The RBA explained: "Historically, dwelling investment in Australia has been very responsive to changes in monetary policy. Although it is difficult to formally test the relationship between interest rates and apartment activity with only a partly completed cycle, it is likely that the new apartment activity stemming from a change in interest rates will, on average, flow through to the economy over a much longer time period than for detached houses."
It typically takes three times longer for an apartment building to be completed following its approval than it does a detached home, but the long-term gains of investing in these may be much greater, particularly for buy-to-let landlords buying multiple properties.
Nevertheless, the recent boom in apartment building throughout Australia means this is where property investors looking for significant returns on their investment may want to consider putting their money in the near future.
Data published by the Reserve Bank of Australia (RBA) shows that apartments accounted for the lowest number of new homes built in the country in the early 1990s, but their growth has since surpassed that of semi-detached houses, with over 60,000 apartments springing up across the property market in 2016. In contrast, fewer than 50,000 new semi-detached dwellings were built.
Although the number of detached homes constructed last year was greater than all other property types, with approximately 115,000 built in 2016, the new figures demonstrate that the apartment sector is an emerging area of the Australian market for property investors from all over the world to pay attention to.
The significant rise in apartment construction over the past decade is primarily being attributed to their low building cost in comparison to other types of home. According to data from the RBA, flats are on average 30 per cent cheaper to build than detached properties, with the bank also believing that changes to people's lifestyles are driving up demand for apartments, fuelling their growth.
The RBA explained: "Historically, dwelling investment in Australia has been very responsive to changes in monetary policy. Although it is difficult to formally test the relationship between interest rates and apartment activity with only a partly completed cycle, it is likely that the new apartment activity stemming from a change in interest rates will, on average, flow through to the economy over a much longer time period than for detached houses."
It typically takes three times longer for an apartment building to be completed following its approval than it does a detached home, but the long-term gains of investing in these may be much greater, particularly for buy-to-let landlords buying multiple properties.
Nevertheless, the recent boom in apartment building throughout Australia means this is where property investors looking for significant returns on their investment may want to consider putting their money in the near future.
