Better Apartments' planning scheme reduces market choice and increases cost

Better Apartments’ planning scheme reduces market choice and increases cost

The cost of constructing a new building in Sydney, Melbourne and Brisbane is comparable, so why is there such a dramatic difference in the price of apartments?

By mandating minimum apartment sizes in Sydney after the implementation of the SEPP 65, the result was an increase in the number of bright, large, luxurious apartments, absolutely – but only for those who could afford to live in them.

Developers immediately lost out on yield in their proposed developments and delivering projects simply became too expensive. This drove down supply and as a result, drove up prices to an unsustainable level.

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Billions worth of new houses and apartments have been approved

Billions worth of new houses and apartments have been approved

NEW HOUSING figures are clawing their way back up with new figures revealing billions worth of new houses and units approved for construction.

Melbourne has the highest value of construction throughout the country according to an Housing Industry Association report with more than $385 million worth of property already given the go ahead.

South Morang, about 22km from the Melbourne CBD is not far behind with $277 million worth of construction slated to go ahead.

The Homebush Bay and Silverwater region in New South Wales is also expected to undergo a building surge with more than $257 million worth of development approved.

The HIA has analysed which are Australia’s hottest housing markets by combining the value of approved developments with population growth.

It rates the ACT as Australia’s hottest housing market with Crace, about 9km from Canberra the top performing area.

It had an annual population growth of 58.1 per cent during 2012, 2013 and $112 million worth of new dwelling approvals.

Billions worth of new houses and apartments have been approved

Bonner, about 13km from Canberra, was the second strongest performer with its population up by 43.3 per cent and $121 million worth of building approved.

In the top twenty the ACT took out the top three spots.

There were eight Victorian locations, four in Western Australia, three in New South Wales and two in Queensland.

According to the HIA figures new dwelling commencements in Australia rose to 162,000 during 2012, 2013.

Both Tasmania and South Australia didn’t make it into the top twenty list this year.

HIA senior economist Shane Garrett says the two states had not made it into the list for the past two years.

“However, the gradually improving situation in both markets means that we can look forward to them battling it out at the national level in the near future.’’

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Price is right for lifestyle

Price is right for lifestyle

If you add it all up, those strata levies you pay for facilities such as pools, gyms and concierges can be good value.

There’s increasing angst among some apartment owners about high strata levies, which for some can be more than $20,000 a year. No-frills apartments with low levies are becoming more popular.

But developers also say many buyers, particularly owner-occupiers, are prepared to pay for the many lifestyle facilities that some big Sydney complexes offer: pools, gyms, spas, concierges and even rooftop cinemas. Others have tennis courts, music rooms and libraries.

General manager of developments with the Crown Group, Pierre Abrahamse, says inner-city buyers especially are keen on in-house facilities.

”If you don’t have the facilities in the building and people want to work out or go to a swimming pool, they’re going to have to join a gym or go to the local pool anyway,” he says.

”Having facilities within the building gives people that level of convenience.”

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