As house prices continue to rise beyond the means of many Australians and drivers for property purchases shift, apartment living is becoming more and more popular. Whilst the ‘suburban Australian dream’ has seen detached homes on quarter acre blocks idealised for many years, the reality is that it’s now unachievable for many households, and undesirable for others. These shifting apartment living trends have tangible impact for strata owners – presenting a myriad of challenges and opportunities. We can also see a connection between these trends and amendments to the Strata Titles Act 1985 that took effect 1 May 2020. We’ve reviewed the wealth of data available, to concentrate it down into three main trends, with actionable takeaways for strata owners:
Apartment Living Trend #1: Residents are motivated by premium Lifestyle Offerings
Australian Apartment Advocacy’s (AAA) 2021 Apartment Survey research results found that 84% of residents chose their apartment for its location, followed by 57% for the lock and leave lifestyle. Most residents surveyed by AAA described their apartment as being walkable to shops, cafes, public transport and parks or the river/beach – reinforcing the high focus on convenience of location. Furthermore, as lot sizes grow smaller and apartments become more efficient in their use of space, residents are increasingly looking at the greater complex offerings such as communal gardens, swimming pools, rooftop entertaining areas, BBQ facilities and gyms which extend the lifestyle capabilities of the apartment, when comparing to detached alternatives.
What we expect to see in the future: Strata owners or company members should consider their strata complex offerings and what additions or upgrades may be achievable – can they revamp common areas, landscape communal gardens, or add BBQ facilities to make the space more purposeful and appealing? Using the current trends noted above, it suggests these types of additions or upgrades would be in the interest of all strata owners – meaning it will be easier to put forward a case and pass a motion. Furthermore, some of these common property improvements may be included in the strata’s 10-year maintenance plan, allowing access to the reserve of funds for project completion, as introduced in the 2020 amendments to the Strata Titles Act 1985 that took effect in May 2021.
Apartment Living Trend #2: Residents are Socially & Environmentally Conscious
With Millennials being one of the most populous generations, it should come as no surprise that AAA’s research showed that half of all strata residents are Millennials, aged between 20 – 40 years, of which almost half are renters. Millennials are committed to implementing the UN’s 17 Sustainable Development Goals which provides a shared blueprint to action social and environmental issues such as ending poverty, improving health and education, reducing inequality, tackling climate change and working to preserve our oceans and forests. 76% of Millennials think climate change poses a serious threat to society and have grown up viewing it as an existential threat, worrying about rising sea levels, and witnessing one natural disaster after another. As consumers, they seek longevity and are willing to spend more on sustainable products and services, with a recent Nielsen study noting that 75% of Millennials have altered their purchasing habits and made significant changes to their lifestyle to lessen their environmental impact, compared to only 34% of Baby Boomers.
What we expect to see in the future: Strata owners or company members need to adopt socially and environmentally conscious initiatives. From lower-cost solutions such as installing energy-efficient light bulbs, planting sustainable native gardens, installing bike racks, utilising rainwater and facilitating composting, to higher-cost upgrades such as installing smart home technology systems, electric car charging stations and switching to solar power or hybrid solar PV systems. The amended Strata Titles Act 1985 also modernised how schemes are run, introducing electronic options for some communications, and making it easier to obtain strata company approval for installing sustainability infrastructure on common property, and make improvements which go beyond simple repair and maintenance. Furthermore, as environmental initiatives can be passed through general resolution, strata managers only require 50% support to pass the motion.
Apartment Living Trend #3: Residents are seeking Easy Care & Low Maintenance
Lifestyle factors proved prevalent through AAA’s research, with the desire for less maintenance the key reason residents moved out of their previous home. Residents chose an apartment over other property types because it was easier to care for and maintain, for its security and because it was the right size for what they needed. These aspects form the foundation for the growing market segment called Rightsizers. Largely driven by Australia’s ageing population, Rightsizing is the move from large, detached family homes to apartment living, providing residents with a wealth of lifestyle benefits.
What we expect to see in the future: Strata owners or company members need to invest in quality ongoing maintenance and repair solutions to appeal to this growing market segment. Ensure the strata’s technology and security measures are up to date – consider installing an electric gate or video intercom system for the front entrance so residents can identify visitors. Following the introduction of a 10-year maintenance plan and modernisation of communication processes to the amended Strata Titles Act 1985 in 2020, strata schemes are able to better support the long-term planning and upkeep of common property, allowing ease of approval and a reserve of funds for such maintenance and repair projects as listed above. By being proactive with maintenance and repair, strata owners will be able to effectively target the growing consumer market of Rightsizers.
As we pivot in response to these trends we’re observing and experiencing in the industry, it’s great to be supported with the tools and clarity provided in the amended Strata Titles Act 1985. Have questions as to how this applies to your strata or need assistance bringing these initiatives to life? ESM’s experienced Strata Managers can provide a variety of professional services to ensure your strata property runs as smoothly as possible, click here to contact our team today.