- BRW Lists
Published 06 December 2012 05:15, Updated 06 December 2012 09:41
Vertical village: The Jacksons Landing project near the Anzac Bridge, in Pyrmont, Sydney, has transformed an industrial wasteland
Last month the finishing touches were given to the last apartment tower in Lend Lease’s Jacksons Landing development – one of the Sydney foreshore’s first major urban regeneration projects, which, over 16 years, has turned an industrial wasteland into a waterfront residential precinct. It’s home to 3000 residents, with gleaming new apartments and sporting facilities lining the waterfront, including 3.2 hectares of open space.
But Australia’s apartment experiment is still far from conclusive. In fact, in many ways policymakers are only just beginning to take apartment living seriously.
Long commutes and poor affordability are tempering the love of the house. Sales of new homes on the far-flung fringes are dwindling despite soaring rents and a shortage of housing. Turning inner-city industrial zones into vertical villages is surely the answer, isn’t it?
Not unless governments and city residents change their attitudes towards density, says Matthew Quinn, the outgoing head of the nation’s largest housing developer, Stockland.
Under his leadership, Stockland gave apartment building a red hot go. It built a 34-storey apartment tower – The Hyde – on its former Sydney CBD headquarters and sold $100 million of apartments off the plan within the first five hours of its release in 2006. Sales were so popular it suspended trading mid-morning and raised its prices. But it was an apartment and retail development in Balgowlah – near Manly, on Sydney’s northern beaches – that soured the experience. Quinn blames the nine years it took to build on planning delays and court battles with Manly Council, resulting in $36 million in interest just to hold on to the land.
In 2010, he told a NSW government forum that Stockland had given up on the sector. Last month, as Quinn stepped down for his successor, former UBS investment banker Mark Steinert, he wasn’t backing down. He said it was still easier to build houses on the fringe.
“The NIMBYs are a big issue,” Quinn told the Australia-Israel Chamber of Commerce property lunch on November 28. “Until there is a radical change of policy so the greater good governs . . . it’s not going to change.”
According to BIS Shrapnel’s Emerging Trends in Residential Market Demand report, drawn from census figures, one- quarter of Sydney residents now live in apartments, up from one-fifth in the early ’90s. They are the first home away from the family for 47 per cent of 20- to 34-year-olds. But beyond that age the detached house is still king. It remains to be seen whether Australia will adopt the Asian city norm of raising families in apartments or continue to view them as a transitional place or an investment.
Policymakers are hoping for the former. As the mining boom loses its sheen in the coming years, they are hoping construction will fill the employment gap.
Young home buyers in NSW, Queensland and South Australia in effect are being bribed with government grants on offer only for new homes. A wide-ranging review into the strata sector may iron out some of the disputes that characterise apartment living.
Sitting next to Quinn at the Australia-Israel Chamber of Commerce lunch, Infrastructure NSW chairman Nick Greiner said state and federal governments needed to focus on urban renewal over urban sprawl to prepare for Sydney reaching 7 million people by 2050. “So how the government facilitates that, rather than make it difficult or impossible for the private sector to deliver significant urban density, is really important,” he said. “The great majority of [residents], around 80 per cent, will live in existing areas.”
Whether that is achieved could depend on our appetite for change.
“The ‘not in my backyard’ syndrome is a major limitation and, in a way, baby boomers like me have got to have a change of attitude,” BIS Shrapnel managing director Robert Mellor says. “Otherwise they are really forcing their kids into a situation where they may not be able to afford to live in Sydney.”
Approvals to build town houses and apartments were up 18.3 per cent year-on-year, according to September figures from the Australian Bureau of Statistics. House approvals were down 0.7 per cent. Apartment king Harry Triguboff appears to be preparing for good times as he has spent $200 million on Sydney apartment site acquisitions in the past year.
And the managing director of Lend Lease’s development business, Denis Hickey, says he expects to build a lot more. “Medium to high density residential living remains an attractive market, driven by demographic changes, and a growing inner-city workforce with changing living preferences.”