_Rightsizing: the downsizing trend toward luxury apartment living
The Rightsizing – Australian Prime Residential Insight 2020 report found buyers are looking for low-maintenance properties, but with house-like proportions and great amenities.
In essence, they are looking for luxury apartments with at least three bedrooms and two secured car spaces in medium and high-density projects in prime suburbs in Australian cities.
While ‘Active Retirees’ are one of the main rightsizing buyer categories for prime apartments, the other two main buyer categories are ‘Entrepreneurs’ and ‘Families’, according to our research.
The Head of Residential Research, Australia Michelle Ciesielski said: “Perhaps surprisingly, rightsizing also appeals to the younger generations, and we are seeing this at a much earlier stage than in previous years given the agile, transient and global nature of their work and play.
"For active retirees, many buyers tell us their house is no longer required to provide the lifestyle they want. Often the cost to upkeep the home, pool and garden outweighs the surplus space they once desired. Downsizing the living areas is not part of this movement – the yard most certainly – but the new luxury apartment must be the right size, with amenities to match. Rightsizers want to be in a walkable location with proximity to activity hubs and amenities."
“From the apartment itself they desire high security and concierge for lock-up-and-leave, a reputable developer and builder with certainty of delivery, single-level, in-house amenities, a good view and aspect, access to transport links, a sense of community within the complex, smart living technology and a new modern building.”
The cost of the quarterly owner’s corporation levy and contribution to the growing sinking fund is often cited as a hurdle to rightsizing, but our research found average quarterly costs for a 3-bedroom prime apartment (ranging from $3000 to $8000) were cheaper than the upkeep for a 3-bedroom house in a prime suburb ($9000 to $15,000).
Ms Ciesielski said luxury apartment trends to watch over the next three years include the growing ‘active retired’ group, the improved global connectivity with direct flights to Australia increasing competition from international buyers seeking second homes and the undersupply of product.
Our research found the share of three-bedroom luxury apartments being built over the next three years falls for Sydney medium-density projects (to 44%), Sydney high-density projects (to 14%) and Melbourne high-density (to 21%).
The largest share of 3-bedroom apartments to be built in prime suburbs is in Brisbane medium-density projects (87%) whilst the largest growth in the share of 3-bedrooms being built is in Perth medium-density projects (from 27% to 50%). In the past three years, the Gold Coast saw the highest portion of 3-bedrooms built, at 70% in medium-density projects, this expected to rise to 81% built by 2022.
According to Associate Director, Prestige Residential, NSW Adam Ross, demand from rightsizers in Sydney is coming from both retirees and increasingly entrepreneurs who are looking for homes without the hassle of maintaining gardens, pools and tennis courts.
“The geographical migration patterns for prestige properties have remained largely unchanged over the last 10 years,” he said. “For example, we’re still seeing people move from large homes on large blocks with pools and tennis courts in places like Wahroonga, Warrawee and Killara on the Upper North Shore to a three-bedroom-plus apartment or townhouse in McMahons Point, Milsons Point, Lavender Bay or Kirribilli.
“This enclave is also popular with people from Mosman and its surrounds due to CBD access, a variety of transport options, parks and close proximity to cafes.
“Potts Point is another popular spot for luxury downsizers from the Eastern Suburbs. Whilst many want to be at the “Paris end” of Macleay Street, its immediate surrounds are drawing interest from frustrated prestige buyers who can’t seem to secure a property on the main strip.
“We recently marketed a penthouse in the area which saw scores of buyers from Bellevue Hill, Darling Point and Rose Bay inspect the property.
“Due to limited availability of large, low maintenance premium properties, when they come on the market they are hotly contested and this often results in out of line prices.”
Partner, Crown Residences at One Barangaroo, Erin van Tuil said the demand for rightsizing was more prevalent today than ever.
“Buyers of Crown Residences at One Barangaroo, which is arguably Australia’s most prestigious rightsizing opportunity, are looking to move away from large houses into a home that provides a high-quality standard of spacious living, while reducing the maintenance costs.
Image: Penthouse living area, Crown Residences at One Barangaroo
“Crown Residences at One Barangaroo offers that exactly, but an added appeal for our buyers is a level of serviced living that is unmatched anywhere else in Australia, testament to the Residences being the most prestigious homes to ever list on the Australian market.
“As the country’s first fully integrated hotel branded residences, our homeowners at Crown Residences have access to all of the services from the hotel below, from having their bed linen changed to ordering a private chef to their Residence, or even the more coveted of asks.
“Residents will also have access to amenities such as a luxury spa, gym, pool, tennis court and priority booking to the 14 restaurants below. For those seeking privacy and better accessibility, the Residences offer 24-hour security, a private entrance and valet parking.
Image: Residents' swimming pool, Crown Residences at One Barangaroo
“Those who have already invested come from all walks of life. There are entrepreneurs seeking a city home to come and go as they please, families who imagine a home to cater for all ages and assist with the cleaning, linen and a fully stocked fridge, as well as retirees who seek no more than to thoroughly enjoy their later years in life, without the worry of maintaining a large house.
“Residing in Crown Residences at One Barangaroo lowers hold costs, with no need for cleaners, gardeners and other property maintenance costs.”