With Millennials entering the property market, as well as an increasing and ageing population, the apartment sector will see certain trends dominate in 2020. In turn, these trends will have a significant impact on both investors and people looking to buy an apartment. If you fall into one of these categories, here are the five apartment trends you should keep an eye on this year.
Repurposing Industrial Buildings into Apartment Blocks
With an increasing population and the pressure for housing (and profit) rising, vintage/industrial buildings are being repurposed into apartment blocks. The Former Town Mill, a 19th-century mill in Graz, Austria, was transformed into a modern apartment complex. Loft-like flats on four storeys were created for a young and urban clientele while preserving the mill’s large, open, communal spaces and showcasing its beautiful timber skeleton.
Station F (previously known as Halle Freyssinet) is a large 20th-century train shed in Paris, France that was turned into the “world’s biggest start-up campus”. But it doesn’t only accommodate tech-based start-up businesses, it also houses 100 6-bedroom apartments where young entrepreneurs live together and share amenities.
The United States is taking up this trend as the population continues to grow and less land is available for new apartment developments. More vintage and industrial buildings will be converted into apartments, which is good news for both buyers and investors alike.
A report by UBS found that Millennials are three times more likely to order takeaway than their parents. This has resulted in fewer kitchen islands and minimal counter space being built in new apartments marketed to young people. By 2030 most meals currently cooked at home will be ordered online and delivered from restaurants or central kitchens, which means kitchens in apartments will gradually shrink and eventually disappear altogether.
One factor driving the gradual extinction of the kitchen is the rise of food delivery services, with food delivery apps in the top 40 most downloaded apps. This is due to the fact that ordering-in is more convenient and cost-effective than making a meal from scratch. So if you don’t find a kitchen in an apartment, you’ll know why (and it’ll be cheaper to buy too!).
Optimising for Retirees
New research from the Property Council revealed that retirees prefer apartment living because paying for an apartment, particularly in a retirement village, is cheaper than buying a two-bedroom house. As a result, almost 30% of new retirement villages have apartments compared to 15% of existing developments.
What’s more, modern retirees want easy access to health services on-site and recreation spaces, so 97% of new developments have facilities and services like cafés, cinemas, hair salons, community centres, social programs, and emergency call systems. Installing modern lifts or upgrading old lifts for seniors will also enable them to move up and down floors safely and easily, maintaining their independence and ability to get out and enjoy life.
If you plan on retiring this year, you may want to consider buying an apartment in a retirement village. If you’re an investor and considering Australia’s rapidly ageing population, you could invest in a retirement village apartment for higher returns.
Rise of Micro-apartments
The co-living trend has also taken off in Australia, with real estate agents reporting an increase in demand for micro-apartments in the inner city, which usually costs less than $500,000, as banks refuse to lend larger loans to buyers. This shows that it’s a good idea to buy or invest in a micro-apartment this year.
A micro-apartment is a single-room apartment with just enough space for sleeping, sitting, a tiny kitchen, a limited amount of shelves, and a bathroom. The laundry and common areas are shared with other residents and a community manager is responsible for keeping the place running. Your social, housing and expense needs are all handled in one place.
Whether it’s in the city or in the suburbs, walkable communities have also picked up the pace with an increase in restaurants, retailers, and services opening within or near apartment blocks. Everything is within a 5 or 10-minute walk, so people can live, play, and sometimes work without having to drive their cars. This is great for singles and empty-nesters who don’t want big yards and long commutes.
The factors giving rise to walkable communities are fewer people driving cars, less newly developed land, and preference for small retailers over giant retailers that are often located far away. It may be expensive to buy an apartment in a walkable community but it’s good for investment and for buyers who want to be close to everything.
Looking to buy or invest in an apartment?
If you’re considering buying or investing in an apartment in 2020, keeping an eye on apartment trends can help you make important decisions and determine what’s best for you, especially when it comes to price, location, and features. As a buyer, you want to ensure that you’ll be satisfied with your choices. And as an investor, you want to ensure that you get a good return on your investment.