few new homes are being built in apartment form.
As Rob correctly points out, #viability or #feasibiilty is the main issue for apartment projects, not planning as some believe it.
(The opposite is true for #greenfields and larger #townhouse developments, where navigating the myriad of planning issues remains a much bigger problem than feasibility.)
Historically, most infill apartment projects get approved through the planning system. Recent announcements to streamline the process and increase certainty assist, but not nearly as much as would be needed to make them viable again.
Substantial building cost reductions, tax incentives and regulatory reforms are all needed. None of which appear to be on the table (or affordable) currently.
The chart from Richard Temlett at Charter Keck Cramer demonstrates the rapid drop off of apartment commencements since FY18 across the country. This is from a combination of: • (much) higher costs • lower productivity • increased design regulation • higher taxes and charges • growing underlying house prices
This means that apartment projects remain highly risky and non-feasible across large parts of the country.
Most don't appreciate the impact of the apartment "Goldilocks Zone" in the mid-2010s. A perfect combination of: • high demand (from investors, not owner occupiers) • (relatively) low construction costs • easier planning regulations • better incentives • low interest rates
Meant large numbers of units could be delivered successfully over that period.
Those settings have fundamentally changed, and already baked in challenges – macro and micro – mean we won't revert back any time soon to those Goldilocks conditions.
🤔Aiming to unlock more apartment #development is a worthy pursuit. But it remains far more rational to look at alternative, far more viable types of housing to deal with the short to mid term challenge whilst other initiatives can help longer term.