The tedious reality of the long commute

Last week saw the release of March Quarter house price report and on the surface it was pretty depressing reading with both house and unit median prices falling.  But in amongst the bad news were some interesting points which I see as positive for the future of the Sydney apartment market.

I’ve written before about the increase in consumer compromise in real estate. People are prepared to accept smaller living spaces if the overall quality of life is better particularly in relation to work, transport and services.  The traditional Aussie love of the freestanding house on a quarter acre block is being diluted by the tedious reality of the long commute!

A trend is starting to be reflected in the numbers with the March Quarter figures showing unit prices fell by less than house prices.  Also reported was the fact that annual capital growth for units in Sydney was slightly higher than that of houses.

The latest stats show demand for units is stronger than houses with national unit rentals growing by 4.9% while house rentals grew by 1.3%.

These trends are good news for investors.  Apartments are more affordable but they are increasingly delivering good capital and rental returns even in comparison to houses.