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Density rising in outer suburbs as buyers look upwards

Higher density housing is creeping into the outer suburbs of major cities and developers increasingly look towards urban renewal and skew products towards changing consumer wants.

Increasing owner-occupier focus on smaller projects in fringe and middle ring locations and a more diverse renter pool has caused developers to rethink their approach, said Urbis director Mark Dawson.

“(One issue is) scarcity of supply in the middle ring areas of cities,” Mr Dawson said. “As the demand profile for who's buying apartments has shifted to owner-occupies, the developers responded by chasing a different type of location and product that’s not as high rise and is a bit more owner-occupier focused in its design and marketing.”

Mr Dawson also noted developers are increasingly pursuing mixed-use strategies in growth areas traditionally dominated by house and land packages as newcomers to the areas look for greater housing options.

“All areas are in a constant cycle of renewal. In more recent times, there is that trend pushing into what outer areas and I think that will continue,” he said.

Comparing the locations of apartment completions in Sydney and Melbourne from 2015 to 2017 and 2018 to 2020, there is a notable rise in the number of projects in outer city precincts, highlighting new development frontiers. Melbourne showed a 25 percentage point change towards outer-city developments while Sydney showed a change of percentage points over the periods, according to Urbis Apartment Essentials figures. It is proving not only to be occurring in Australia’s two largest housing markets.

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