Apartment living is becoming more popular across Australia, as new housing figures point to a surge in high-density construction.
According to a new report from BIS Shrapnel, dwelling building activity is reaching a new high in Australia and the majority of these new builds are apartment blocks.
Currently, two high-rise apartments are being built for every five detached houses, a rate twice the historical average, said BIS Shrapnel associate director Kim Hawtrey.
“New housing starts are forecast to reach 190,000 nationwide in 2014/2015, which will surpass the previous peak of around 187,000 set back in the 1994 boom,” Dr Hawtrey said.
”In the next two years we’ll also see the recent emphasis on high-rise units continue.”
Housing starts have grown by 14 per cent in 2013/2014 to a total of 184,350 annual commencements.
BIS Shrapnel predicts commencements will rise by a further three per cent in 2014/2015, before easing between 2015 and 2017.
Strong population growth is a key driver behind the upswing in housing construction.
Dr Hawtrey said population growth was at 1.7 per cent per annum, so that demand for housing outstripped supply.
“We estimate that it will take the next five years to eliminate the unmet demand for housing. We therefore do not see this housing shortfall closing until 2018,” Dr Hawtrey said.
New South Wales has the strongest outlook, with housing starts predicted to grow by nine per cent, while Queensland is set for a three per cent upswing.
Victoria has experienced over-building and may see a sharp contraction in the sector by 2015/2016, according to Dr Hawtrey.
Previous growth leader, Western Australia, is set to fall by five per cent as mining investment begins to fade.