Victorian homebuyers are yet to fully embrace apartment living, suggests research showing just a quarter of the state’s apartment residents own their homes.
The apartment sector remains an investor-dominated market, with tenants making up 50 per cent of the property type’s occupants, according to a new University of New South Wales report.
In comparison, 14 per cent owned their home with a mortgage and 11 per cent owned outright.
A further 14 per cent of Victoria’s apartments were classified as “unoccupied” at the time of the latest census.
Associate Professor at UNSW City Futures Research Centre, Hazel Easthope, said this included both empty properties and non-permanent residences like holiday homes and short-stay accommodation rentals.
“(The apartment market) really is an investor market. New buildings in particular see a higher proportion of investor owners,” A/Prof Easthope said.
“In order to build an apartment complex, developers need to get finance from a bank. In order to get finance, unless they have a lot of money already, they need to make off-the-plan sales, which are more typically made to investors.”
But the report, commissioned by the Strata Community Association, draws on the latest census data to also reveal 8 per cent of Victoria’s population reside in apartments, equating to more about 471,000 people.
Less than half the state’s apartment residents (42 per cent) were born in Australia, with China (8 per cent) and India (6 per cent) the next most prominent nationalities.
And only half spoke English at home, followed by 9 per cent Mandarin and 2 per cent Cantonese.
A/Prof Easthope said this reflected the fact new migrants typically sought affordable rental homes that were accessible to employment and amenities, which often meant apartments.
Meanwhile, 57 per cent of Victoria’s apartment residents were aged 20-39, with the other age groups taking splits of 18 per cent for 40-59, 13 per cent for 60-plus, and 12 per cent for sub-20.
“Lone-person” households dominated apartment living at 39 per cent, followed by couples with no children (23 per cent), group households (11 per cent), couples with children (9 per cent) and single parents (5 per cent).
The proportion of Victorians living in units with children (14 per cent) was much lower than in New South Wales (24 per cent).
But the report also reveals Victoria has adopted strata complexes — buildings divided into “lots” that are typically apartments, villa units or townhouses — more than any other state.
Victoria’s 115,968 complexes account for a third of the national total, contain 907,135 lots, and have an insured value of more than $343b.
A/Prof Easthope said Victoria was home to “a large number of two-unit strata complexes”, such as semi-attached townhouses, that were typically more appealing to owner-occupier buyers.
The explosion of strata complexes since their introduction 60 years ago reflected the demand for new housing driven by population growth, and government policies promoting “building up, rather than out within existing urban areas”, she said.
Strata Community Association Australasia chief executive Alisha Fisher said it also reflected people placing “increased value on access to their places of work, shopping and entertainment precincts, and recreational amenities”.