Flats, units and apartments account for the next most significant segment of the industry. These dwellings do not have their own private grounds and usually share a common entrance foyer or stairwell. The proportion of flats has steadily grown in Australia by about 5.0% over past five years, specifically due to increased interest in high rise apartments (apartments buildings four storeys or greater), which already made up the large majority of unit, flat and apartment development. This has been in line with a growing domestic population, which has placed increased pressure on space requirements, particularly in those suburbs surrounding the CBD of the major capital cities. Approximately 66% of households residing in flats are renting.
Semi-detached homes comprise the final proportion of the market. These dwellings have their own private grounds, are attached by a common wall and are known as row or terrace houses and townhouses. The proportion of semi-detached homes remained largely stable over the past five years, growing less than 1.0% over the past five years. Households in semi-detached houses are nearly evenly split between renting or owning (fully owned and purchasing) their properties, at 47.8% and 49.6% respectively.
Many developers offer housing options within communities – large areas of housing established by the developer. These communities can take the form of any type of dwelling and also include retirement living complexes. With continually rising urbanisation, an ageing population and restrictions on housing supply expansion, these options are growing in popularity.
Other dwellings do not concern the industry due to their lack of association with bricks and mortar development. These include all occupied caravans, cabins, houseboats, and improvised homes like tents and sheds.
Stockland with a market share of share: 5.7% followed by the Mirvac Group (3.6%).
Demand from 2011-12 is expected to recover after a bumpy ride over the last five years. Growth in demand is likely to occur as a result of solid economic and financial conditions, and steady population growth, but raised interest rates and lowered housing affordability due to restricted housing supply will lead to more conservative action from consumers.
IBISWorld forecasts industry revenue will grow from $29.1 billion in 2011-12 to $30.1 billion in 2016-17, representing annualised growth of 0.7%. Profit levels are expected after the events of the global financial crisis to stay consistent particularly with major developers as expectations of market recovery have become more subdued, and thus are not seeking revenue and profit maximisation via speculative activity, creating greater stability in profit levels.
To purchase IBISWorld’s full report on Australia’s Residential Property Operators and Developers click here.
Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.
