Australian apartments won't be getting any smaller

Peter ChittendenFebruary 11, 20130 min read

Excluding the prestige market or developments targeting empty-nesters, over the last five or so years the internal areas of the typical apartment have diminished considerably. Previously, the average studio was approximately 45 square metres, and one-bedroom apartments averaged 65 square metres. Two- and three-bedroom apartment averaged 90 square metres and 120 square metres respectively. At present, the average studio apartment has reduced to 38 square metres, while the average one-bedroom apartment sits at 50 square metres.

An average two-bedroom apartment typically ranges from 75 square metres to 85 square metres, and the few three-bedroom apartments being developed now start at approximately 100 square metres. Designs are changing and lifestyle demands are driving this trend, however the internal areas cannot diminish much further and are set to plateau. We have now seen this in the empty-nest market, where product below three bedrooms (and possibly with a study) will either not sell or take a long time to market.

Design at the forefront

The downsizing in apartments is not an isolated trend, and there are several other parallels worth noting that all point to how as a society we are responding to ever more pressures on our cities. Holden has announced that it may not make any more Commodores after 2014 as we switch to smaller cars. And, speaking of cars, as more inner-city apartments do not come with parking the rise of car share schemes is set to be more common. Developers are not including parking in some areas in response to council planning but also in an effort to make apartments more affordable.

These trends are all based around the shift in demographics towards more centralised apartment living, and they will continue to be key marketing points as they reflect a wider social demographic.

As apartments get smaller, design will have to get smarter, just like cars, as a small car now has features once only associated with the luxury end of the market. Design qualities will extend beyond how the available space used to include very pragmatic issue like providing ample storage.

An example from New York

Recently the New York City Mayor Michael Bloomberg announced the winner of the city’s micro-apartment competition. The contest launched last July was to design a 22-square-metre to 33-square-metre apartment. The winner (a collaboration between Monadnock Construction, the Actors Fund Housing Development Corporation, and nARCHITECTS called My Mirco NY) helps to show how good design can make a smaller apartment a very appealing space.

Some of the key points from the winning design included: high ceilings, dual-use furniture, a long, narrow floor plan, micro kitchen, floor-to-ceiling storage, and loft space.

Like Sydney, New York is also facing similar concerns about affordability, which was part of the reason behind the contest. To address affordability, 40% of the units will be offered below market rates and will be built on city-owned land, and as such will be social housing.

Like Australia, in the US the growth rate for one-person and two-person households is above that of larger households, and this is driving the need for quality design of smaller apartments.

The New York example again demonstrates that as apartments get smaller design qualities will be important, and developments will need to be based on socially diverse and facility-rich areas. Planning and local authorities will need to look beyond current regulations and evolve new progressive models.

This is a debate that clearly has an international flavour and urgency. If we are to avoid living in a "cupboard apartment" – even if we can choose to shop in Harrod's food hall, then now is the time for innovative thinking, planning and marketing. It’s a debate that we need to contribute to.

Peter Chittenden is managing director for residential of Colliers International.

Peter Chittenden

Peter Chittenden is managing director for residential of Colliers International.
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