3 Apartment Construction Trends 2018 Builders Should Know

There will be a continual upward trend on apartment construction as a result of economic growth, increasing population, changing demographic, land supply constraints and further urbanisation. For instance, more and more residential buildings are sprouting in Sydney, Melbourne and Brisbane due to availability of amenities, employment and transport infrastructure.

Of course there will be a few slowdowns and temporary decreases in apartment construction activity. There are several variables at play which can heavily depend on building approvals, suitable site availability and overall economic growth. But on the long term (at least for the next 10 years) and on a macro level, there’s likely to be a continual upward trend.

1. The huge role of location & accessibility

As mentioned earlier, economic growth contributes to continual upward trend on apartment construction. One possible reason is that a strong economy presents several more options to consumers whether it’s in the form of employment, business opportunities, necessities or luxuries. As a result, when more options are available in a certain region, naturally more and more people will aggregate in those places.

That’s why preference to location and accessibility is a growing trend among many people looking for a dwelling unit. The apartment building should be easily accessible and from there, leisure and employment centres should be easy to go to. After all, people now want to save time as much as possible when it comes to commuting or travel. This way they can do more with their time and possibly explore more options especially when it comes to leisure and luxuries.

Although the most accessible areas and most suitable locations (e.g. near transport infrastructure and mass transit) are very expensive in terms of land purchase and development, developers and investors are still willing to put their money on the table. The return on investment is more guaranteed because as it applies to business (especially retail stores and restaurants), it’s always about location, location and location.

To better tap into this opportunity, builders and developers may look into key projects that will receive priority government funding (e.g. NSW Key Projects 2018-2019). Studying their locations can give great insights on future apartment construction projects. Often, new construction or upgrading of transport infrastructure (e.g. roads, rail networks) is linked to new residential buildings. Whether it’s causation or correlation (e.g. a third variable is affecting construction of both transport infrastructure and apartment buildings), key road and rail projects will have a huge contribution to location preference and accessibility of a certain site.

2. More dynamic change in supply & demand

One sign of economic growth is the increased speed in the movement of money, products, services and people. This also applies in the residential sector wherein people can move around a lot every few years.

For instance, lifestyle downsizing of an individual or a couple often results to moving into another dwelling unit in a different location. This results to a vacancy which can be interpreted as lost income for the building owner. Perhaps this movement is caused by a career change or aging. As a consequence, this creates some level of uncertainty and this might make investors and developers hold back in their residential building projects. For example, instead of developing 100 dwelling units, the developer might only choose to develop 75 because of the uncertainty. It’s also possible that the project will be delayed until the developer received some assurance about the future of the area.

However, holding back and delays often result to additional expenses and missed opportunities. In the example above, sticking below the maximum potential could result to lost income for many months and years (unfulfilled demand from supposed to be owners and tenants). When it comes to delays, further waiting will make the site and construction materials (along with labour) more expensive.

Aside from downsizing (creating vacancies which leads to uncertainties), owner-occupiers and investors (both domestic and foreign) can make apartment construction, purchase and occupancy more dynamic. For instance, if the owner-occupiers are first-time home buyers (moving out of a family home), this creates a new demand in dwelling units. Also, domestic and foreign investors may further drive up the demand for dwelling units. Investors might be planning to occupy the property (e.g. future migration) or rent out the property (get their return on investment somehow).

Due to geographic proximity, foreign investors from East Asia (including China, Hong Kong, Japan, Taiwan and South Korea) purchase apartments in Australia. The purchase trend might be affected by currency changes (weakening or strengthening of the Australian dollar), favourable political environment and property prices compared to major cities in other countries.

These factors greatly affect the supply and demand in the apartment construction and purchase. With a growing economy (especially if we look at it in a macro scale), expect the changes and movements to be more dynamic. Also, engineers and developers now pay more attention both to the upfront and long-term operating costs of the resulting residential building. After all, cost is a huge factor in apartment construction and purchase.

3. More focus on the building facade

The building facade takes up a significant percentage of the whole construction. Also, engineers and managers now pay more attention to the facade because of its long-term effect and contribution.

Back then the facade was often only thought of as an architectural element. It was mainly for aesthetics and creating a strong and appropriate image of the building and its use. But now, facades play a huge role in the building’s energy performance. That’s because it’s now a huge factor (especially in highrises) in controlling the amount of heat and moisture coming in and out of the building. In fact, acoustics performance may even heavily depend on how the facade was designed and constructed.

In addition, the facade’s design can greatly affect people’s perceptions about the building’s value. After all, first impressions often last. Prospects could make a favourable first impression because of the facade and then notice more details (building interior, its location, future development) that support that favourable first impression.

Aside from greatly enhancing the building’s exterior, the facade can also affect how natural light comes into the dwelling units throughout the day (which can be very important to many owner-occupiers and tenants). Moreover, how the facade’s elements are positioned can also affect the visibility of key views (e.g. street, water body) to the potential tenant or owner.

As a result, facades should be integrated with the building’s overall plan, design and performance. Engineers and architects now work with facade specialists to achieve certain building goals that relate to aesthetics and energy efficiency.

Apartment construction trends 2018 & beyond

Location preference (including accessibility), dynamic changes in supply and demand & more emphasis on building facades are just some of the apartment construction trends that will continue at least for a decade. It’s a complex ecosystem that introduces uncertainties on how engineers and developers plan their projects.

In the actual construction of the residential building, engineers and managers now pay close attention to the facade design and construction. As a result, there are now specialists who dedicate their time and expertise in creating the ideal facade.

Here at CGS Facade Group, our team of facade engineers and designers have international experience in creating the ideal facades with optimum energy performance. They have designed and developed facades and building envelopes in Hong Kong, Macau, Thailand, China, the Middle East and the major cities of Australia. Over the years, we have developed excellent working relationships with Australia’s leading fabricators, builders, developers, and architects to deliver excellent and cost-effective results to our clients. Contact us today and let’s discuss your facade vision and requirements.