Australia’s Low Density Housing Faring Better than High Density Apartments
Low-density developments are faring better, the data showed. Sales for those sites jumped 23.1% last year. “Developers across the country are continuing to shift their focus and risk toward boutique apartment developments and diversifying their portfolios with low-density sites,” Shayne Harris, Knight Frank’s head of residential for Knight Frank’s Australia offices. Meanwhile, interest from foreign investors plunged in 2020, the data showed. There was less than A$500 million of foreign investment last year, down more than 90% from its 2016 peak of A$5.2 billion. It was the first time investment from foreign developers has dropped under A$1 billion since 2012. Because of the Covid-19 pandemic, Australia closed its borders to foreign travel, meaning investors were not able to scout sites as they normally would. That’s kept many from committing to new acquisitions. “Although we’re in uncertain times, we can’t underestimate the impact investors will have on the apartment market as they start to return across the country,” Harris said. “It’s only time before they’re lured back to the new apartment market given the cheap finance, a thinning new supply pipeline and lowered residential vacancy rates.” Some experts also expect Australia is on the precipice of a boom in pent-up foreign demand as soon as borders open and immigration normalizes. Close to half of sales of residential development sites last year were in New South Wales, which had nearly A$2 billion in deals in 2020, according to the Knight Frank report. Victoria followed, with just under A$1.3 billion in transactions.
Tags : INTERNATIONAL Housing Australia COVID-19 pandemic Low Density Faring High Density Apartments