Price Gap Luring Investment Back to Apartments
The doorbell is ringing again as institutional property players from near and far increasingly look to dig deeper foundations in Australia’s $9-trillion housing market.
And with the gap between detached and attached housing prices widening to record levels, the welcome mat is well and truly back out in the nation’s apartment sector.
After shying away from large-scale investment in the sector in recent years, the institutional urge to get back in the apartment game is on the rise again, driven by a dwindling pipeline, strong growth in capital flows and the reopening of global borders as Covid vaccination levels increase.
Stockland, the country’s largest listed residential developer, has recently shown its hand, revealing a plan to “dynamically reshape” its portfolio by increasing its exposure to apartments over the next five years.
The announcement last month—ironically, while the company still rides a wave of detached home sales brought forward by the pandemic—is a clear signal of the shift in sentiment.
“We think the apartments sector has the potential to outperform the established market over the medium term,” says Stockland chief executive of communities Andrew Whitson.