A detailed research study into the average price of an apartment has found that prices are higher in areas of greater density, says the Urban Taskforce.
“The recent mapping data on density issued by the Australian Bureau of Statistics (ABS) identifies the most dense housing areas of Sydney,” says Urban Taskforce CEO, Chris Johnson. “We have assessed the average sales price of apartments in the densest areas and compared this data to nearby areas of lower density.”
“The result of this research is that the sales price of apartments goes up in areas of higher density. The market is showing a clear preference for apartment living in taller towers in denser urban areas.”
“The reasons for this are likely to be the greater number of amenities that are close by in more dense areas. These precincts often include restaurants, cafes, gymnasiums, health clinics, cinemas, theatres and jobs close bye.”
“Chatswood, for example, has average apartment sales of $8,997 per square metre while nearby Lindfield has average apartment sales at $6,415 per square metre. Chatswood has a much bigger centre with a theatre, cinemas, large department stores and a sophisticated transport interchange while Lindfield has a scaled down version of these amenities.”
“There has been a perception by some in the community that apartment towers are generally of lower value than mid-rise apartments but the research data is telling a different story.”
“Another comparison is between apartment prices in Potts Point which has a density over 8,000 people per sq km and prices in nearby Edgecliff with a lower density of 5 to 8,000 people per sq km. The Potts Point apartment sales over recent years average $11,173 per sq km while the average in Edgecliff is $8,326 per sq m. Clearly many people are happy to pay significantly more for an apartment close to the bustling Kings Cross scene and good views over the harbour. Both areas have good public transport with each having its own station but the apartments in the more dense Potts Point are generally in taller towers than those in Edgecliff.”
“Even in Western Sydney areas of greater density have apartment sales prices higher than nearby areas. Parramatta, for instance, with a density of 5 to 8,000 people per sq km has average apartment sales of $5,938 while nearby Westmead with a density below 5,000 people per sq km has an average sales of $4,789 per sq km. Parramatta has the advantage of a major transport interchange, department stores, cinemas, restaurants and many urban amenities. The purchasers of apartments clearly value the access to these amenities.
“The Urban Taskforce research builds on the ABS density maps that list 21 square kilometres of Sydney as having densities above 8,000 people per sq km. Melbourne, by comparison, has only 1 sq km at this density and no other city in Australia has any. London is well ahead of Australian cities with 327 sq km over the 8,000 mark. The 21 density squares in Sydney are closely related to the railway network with Strathfield, Chatswood, Kings Cross and Central Station having high density areas.”
“The detailed sales research was undertaken by PhD candidate Michael (Man Kin) Lam by analysing over 15 recent apartment sales through RP Data information including apartment size to enable per square metre comparisons for each study area.”
Below is the plan of Sydney indicating density hierarchy (Dark red- most dense):
Density map of metropolitan Sydney (see below):
Here is a link to the Urban Ideas issue with further detail and maps:
http://www.urbantaskforce.com.au/urbanideas/march2015/
