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Size doesn’t matter…when it comes to property

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Studio apartments prove attractive for aspiring property owners

Sydney, 9 August 2017: In an increasingly impenetrable property market, it seems aspiring property owners are looking to sacrifice space for location, with 35.5 per cent of Australians stating they would rather buy a studio apartment in their ideal location than a bigger property further away in a less ideal location.

The research, commissioned by Gateway Credit Union, reveals lifestyle is an important factor for Australians when deciding where to live.

According to Gateway Credit Union CEO, Paul Thomas, Australia’s shifting demographic could be to blame.

“As a nation, it’s well known that we love our space and there is research that suggests we have less people living in bigger properties compared to a few decades ago. But it may seem as though our obsession with the traditional Great Aussie Dream of owning a home with a backyard may be at a turning point.

“Today’s skyrocketing property prices means that many are forced to swap one dream for another. Smaller properties that offer a convenient lifestyle, situated in ideal suburbs – often close to city centres and public transport facilities – are now much more desirable than ever before,” said Mr Thomas.

When it came to age, Baby Boomers are most willing to take a studio apartment in an ideal location (44.8%), followed by the younger cohort of 18 to 29 years old (30.8%) and 30 to 49 years old (27.5%).

“Studio apartments were once considered the lowly cousin of the one-bedroom. Today, however, they are a well-suited housing option for mature downsizers and younger generations that are struggling to get a foot on the property ladder,” said Mr Thomas. “In fact, our research corroborates this, with 68.7% of respondents agreeing that studio apartments are a good way for first home buyers to break into the current property market.”

“Affordability, convenience and lifestyle factors have been big drivers behind the growing positive sentiment toward studio apartment living,” said Mr Thomas.

When asked what price Australians would pay for a studio, majority of respondents (67.05%) said they would be willing to pay $350,000 or more.

Mr Thomas warned for all the affordability that a studio apartment provides there is a catch when it comes to securing a home loan.

“Many lenders have strict criteria when it comes to lending for studio apartments.

“As Australia evolves, high-density living will likely increase, not to mention the Australian Bureau of Statistics estimates that one-person households will reach 3.2 million in 2031, or more than a quarter of all households[1]. The popularity of studio apartments will likely continue as a result and yet very few lenders will consider providing a home loan for any space below 50 sqm.

“While the size of the apartment is one factor that Gateway takes into consideration, it’s not the only factor we look at, and it certainly shouldn’t be the determining factor. As a member-owned financial institution, we believe in looking at the bigger picture for our Members. We don’t treat them like a number, we look at each Member and assess their individual circumstances. This is just one way we’re standing by our commitment to help Australians achieve their dream of home ownership; whether that’s for a studio apartment or a house on a quarter-acre block,” concluded Mr Thomas.

END

Click here to view an infographic of the findings.

About the research

The research, commissioned by Gateway and conducted by Ipsos, was compiled through the July 2017 omnibus, which polled 1,050 respondents across Australia.