Australian Strata Buildings are Getting Taller

Or, so says the Australian Bureau of Statistics …

From low rise walk-up strata apartment blocks in the 60’s and 70’s, we’ve seen bigger and bigger strata complexes each decade. But, they’ve also been getting taller and taller as the ABS’ analysis demonstrates.

Introduction

I’ve written about the advantages of smaller strata buildings before in the article ‘Are Small Strata Fish Sweeter? Or, should we just throw them back into the sea …’ but, development trends in Australia have generally led to developers creating increasingly large strata complexes.

It makes sense commercially and from a profit perspective for developers and builders, government planning policies favour increasing densities, and, bigger strata complexes allow for more shared facilities to be provided at a lower per apartment cost.

But, larger strata complexes don’t necessarily mean they are taller strata buildings.

Or, does it?

ABS data and analysis

The Australian Bureau of Statistics collects and publishes data as Australia’s national statistical agency and the official source of independent, reliable information. As the ABS says: they tell the real story of Australia, its economy, and, its people by bringing life and meaning to the numbers.

Last year ABS published an analysis of its data relating to apartment complex approvals and construction starts called ‘Telling storeys – apartment building heights’ that reveals some interesting trends in the height of strata apartment complexes.

It looks at the growth in new strata apartment complexes based on the height of those buildings over 15 years between 2004 and 2019 and provides interesting revelations and insights.

So, here are my 7 key takeaways from that ABS data and report.

1. The review splits strata apartment complexes into 4 height categories as follows:

• Low Rise where the buildings are less than 3 storeys
• Medium Rise where the buildings are between 4 and 8 storeys
• High Rise where the buildings are between 9 and 19 storeys
• Super High Rise where the buildings are 20 storeys or more

Those categories are arbitrary but, conveniently, the Low Rise category matches the only group of new strata buildings in Australia that get home building defect insurance cover over the last 15 years.

So, it tells me that all the other categories of strata apartment buildings [Medium, High and Super High Rise] which the data shows have grown disproportionately more over that time, have been uninsured for building defects.

2. The ABS data include all ‘blocks of dwellings that don’t have their own private grounds and usually share a common entrance, foyer or stairwell’ so that’s not just strata buildings and include non-strata titled apartment buildings, build to rent complexes, boarding houses, etc.
3. Whilst the growth in annual new strata apartment buildings averaged 81.7% between 2004 and 2015, the differences in annual growth between the 4 height categories is very different to that average [and in the case of taller buildings, very significantly different] as follows:

• Low Rise apartment complex growth declined by 46.0%
• Medium Rise apartment complex growth increased by 95.1%
• High Rise apartment complex growth increased by 152.8%
• Super High Rise apartment complex growth increased by 360.8%

That means that High Rise apartment complexes grew by twice the average of all apartments and Super High Rise apartment complexes grew by four times the average.  At the same time, Low Rise apartment complexes were only half the average.

That’s a pretty clear indication that the key focus of strata apartment developers is bigger and taller strata buildings.

The following ABS Graph demonstrates that visually.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. Over the 15 years between 2004 and 2019 new four or more storey apartment buildings rose from 29,695 in the 2012-13 financial year to a peak of 72,258 in the 2015-16 financial year but then began to fall, with 41,146 dwellings approved in the 2018-19 period.

That matches most commentators’ views and other reporting that there’s been a slowdown in new strata development starts recently as I wrote about in the articles:

• ‘Is a Strata Apartment Shortage Coming Our Way? Strata Snaps: September 03, 2021’
• ‘Is Australia Running out of Apartments? Strata Snaps: June 10, 2021’
• ‘Downs & Ups in new strata building approvals … Strata Snaps: May 06, 2021’

It also indicates [to me] that when there is market growth it happens disproportionately in taller strata complexes, and conversely, when there’s a contraction or slow down it similarly affects the taller [High Rise and Super High Rise] apartment complexes first and more quickly.

5. New Medium Rise apartment complexes accounted for the most apartments built over that 15 year period representing 86.% of all new strata apartment buildings over that time.

And, in the competition for development growth between Australian states, the winner was NSW with 128,051 new Medium Rise apartments, followed by Victoria with 69,549 new Medium Rise apartments, and, Queensland with 41,594 new Medium Rise apartments.

But, Victoria’s rate of growth in new Medium Rise apartments was highest at 189.8%, which is almost double.

6. The position is a little different for new High and Super High Rise apartments.

In those categories, NSW had the most new High and Super High Rise apartments with 96,648, followed by Victoria with 88,937 new High and Super High Rise apartments, and, Queensland with 55,818 new High and Super High Rise apartments.  So, the order is the same.

But, each states’ growth rates were 436.9% for NSW, 428.8% for Victoria, and, 37.2% for Queensland.

That shows how popular new tall strata buildings have been in NSW and Victoria, and that there’s been a significant slowdown in their popularity in Queensland.

7. Finally, the ABS data also reveals some interesting trends for approved apartment complexes that have not yet been built [ie: they’re in the pipeline].

The data shows that the pipeline for new Medium, High Rise and Super High apartment complexes is largely the same with numbers at 4,670 for Medium Rise, 4,336 for High Rise, and, 3,942 for Super High Rise.

But, there are only 382 Low Rise apartments in the pipeline.

Conclusions

In many ways, this data confirms what many of us felt was happening intuitively.  But, it is still good to prove that intuition and to support real actions in response by government, the private sector, strata buildings and strata owners.

So, since we’re going to have more bigger and taller strata apartment buildings in the future than smaller and shorter ones, it means we’re going to need people, products, services and businesses that have skills suited to manage, repair, advise and care for those kinds of complexes.

Time to skill up [literally] everyone!

 

This article was contributed by Francesco Andreone, GoStrata

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