Will Apartments Become the Preferred Choice for Living?

Investors looking to add to their real estate portfolios may want to consider purchasing apartments or units, as data from the Australian Bureau of Statistics (ABS) has shown these housing types are growing in popularity.

According to the data, the number of dwelling units approved over the month of October rose in many state capitals. Queensland and Victoria saw the highest increases and reported rises of 4.1 per cent and 2.2 per cent in trend terms, respectively.

In Queensland, this figure has been growing for 22 consecutive months, while in Victoria it has risen for five, showing the popularity of this type of housing across the two states.

New South Wales recorded a rise of 1.3 per cent over the month, but has seen continued growth for 21 months in a row.

Urban Taskforce Chief Executive Chris Johnson commented on the strength of apartments in the New South Wales real estate market and said the Sydney apartment market is "growing dramatically".

"Apartment approvals in October were 2,620 while house approvals were only 1,684 for NSW," said Mr Johnson in a December 2 statement.

"Most of the apartments are located in the inner ring of Sydney where some anti-development action groups are lobbying the NSW government against reforms to the planning system. Clearly the planning system must support the increasing interest of consumers in living in apartments in urban areas."

Mr Johnson explained the government needs to "champion apartment living" in order to combat the issue of housing supply in the city.

However, it's not just Sydney that has seen a significant shift in apartments and units constructed.

The number of multi-unit dwellings approved in Victoria over October saw a large rise, in comparison to September. ABS data showed dwelling approvals for multi-units was 48.6 per cent higher than the previous month, seasonally adjusted.

"After some weak numbers around the middle of 2013, approvals activity in the multi-unit segment has rebounded strongly in September and October. In seasonally adjusted terms, there were 3,112 multi-unit approvals in October 2013," said Housing Industry Association Victoria Executive Director Gil King.

Echoing the issue in Sydney, Mr King noted that Victoria needs to experience a rise in housing supply in order to cope with demand from a rising population.

"It is not enough to simply supply a sufficient number of homes for Victoria's growing population, policy settings must ensure an adequate diversity of housing stock to house an increasingly diverse population," Mr King concluded.