Downsizers drive developers to create larger, 'right-sized' apartment living

When it comes to downsizing, Australian property buyers are increasingly demonstrating that size does matter and, according to a range of property experts, that’s changing the way the development industry is approaching new projects.

And while the Covid pandemic has beenresponsible for a major shift in the way people integrate their home life withbusiness – including the provision for larger home office spaces – someprogressive development companies are already meeting that need.

“Downsizing has been a major driver of demandfor apartments in lifestyle areas around the country, especially markets suchas the Gold Coast,” says Urbis Gold Coast director Matt Schneider.

“These buyers are typically highly activeretirees, or empty nesters, who want apartment living ‘with the lot’, and moredevelopers are responding to this demographic. We’re seeing that playing out nowin terms of larger apartments, particularly in the Southern Beaches Precinct,and more lavish amenities.

“Even to the extent that people who may havelived in smaller apartments on the beach are happy to move to other areas toensure they can maximise larger living spaces including larger home offices.”

Dubbed “rightsizers”, this segment of thedownsizer demographic encompasses a wide range of buyers although it is largelydominated by the boomer generation.

Traditionally the apartment market over thepast decade, particularly in larger cities, has catered to investors with one-or two-bedroom apartments designed to be utilitarian residences for youngerworking professionals as tenants.

While higher density usually translates tohigher yields for developers, Mr Schneider said the data shows apartments havebecome bigger over the past two years.

This is particularly evident in the boomingdownsizer, end user apartment sector which has upsized apartments, added morecarparks, created larger living spaces and added more size to home offices.

Australian Bureau of Statistics datacommissioned by CommSec shows the average size of new homes built in 2018-19was 1.3 per cent smaller than the year before, but the average apartment sizeexpanded by 3.2 per cent over the same period.

The Gold Coast is among the biggest adopters ofthe larger apartment trend, with research from Knight Frank showing 70 per centof medium-density dwellings built since 2017 offered three bedrooms or more,which is higher than any major city in Australia.

“The ABS data on apartment sizes reflects asignificant shift in the type of apartments being built nationally and howthat’s shaping the approach by developers away from higher density projects tothose that are more sustainable and functional,” said Mr Schneider.

“The economic reality in lifestyle cities suchas the Gold Coast, for example, is that there is a ready market for luxuryapartments that offer more space and the flexibility of more bedrooms.

“Apartment buyers may be looking forlock-and-leave, maintenance-free living, but they’re also looking for privacyand amenity with the room to move that they have become accustomed to in theirfamily home.

“Developments that cater to these buyers typicallyoffer residents more landscaped openspace, with recreation areas that enhance a residential community feel, whileoffering large apartments with deep liveable balconies and that are designed tooptimise privacy.”

Amongthe Gold Coast developers taking this approach are some of the best-sellingprojects in the city, includingthe $70 million Flow Residences at Rainbow Bay which has sold out, SpyreGroup’s $77 million Natura at Burleigh Heads offering all large three-bedroomapartments, and Cru Collective’s Siarn apartments at Palm Beach which have allsold prior to construction completion.

Long-timeGold Coast developer Rayjon has also tapped into the strength of the downsizermarket at Vantage Benowa and is looking to replicate its success when itlaunches a project in Burleigh later this year adjacent to the TreetopsShopping Centre.

Rightsizer projects are often defined by spaciouslawns and gardens, multiple carparks for each apartment, expansive indoorresidents’ area, large swimming pool accompanied by an outdoor residents’lounge and an outdoor barbecue area and dining pavilion, as well as a gym andsauna.

“The common denominator with all of theseprojects is they are tailored to the “rightsizer” – the ones who are leavingtheir houses, downsizing, but not sacrificing the living spaces they had intheir homes,” says Mr Schneider.

“These are all large apartments that maximiselivability and space while allowing people to get out of the traditional home.”

In recent years, the Urbis Gold Coast ApartmentEssentials report has shown larger owner-occupier apartments taking a biggermarket share of sales annually on the Gold Coast.

In its latest quarterly report, Urbis SeniorConsultant Lynda Campbell says the owner occupier market targeting largerapartments has been the standout performer during the Covid era.

In a separate report, on the sale ofmillion dollar plus apartment, townhouse and duplex sales across the Gold Coast,Urbis points to strong sales increase in this sector.

Across the Gold Coast during 2019 therewere 478 apartment, townhouse and duplex sales priced at $1 million and over.This is an increase of 57 per cent on figures from five years ago.

Between 2014 and 2019 there was anincrease of 13 per cent per annum in sales priced between $2 million and $2.9million.

“What is evident is the downsizermarket doesn’t want to sacrifice the space they may have had in a home and arelooking for projects that offer house-style living in larger, more spaciousapartments.

“Boutique-style projectsthat cater to premium owner-occupier market are driving this trend,” said MsCampbell.

“It’s become a value proposition that’sactually working for buyers and for developers. In the end, this type of developmentprovides a better outcome for the broader community as well.

“And people will sacrifice being on the beachto find the apartment that offers these larger living options.”