Property prices are at a premium, housing is in short supply, and international borders are poised to swing open, so where would Australia’s major capitals house an influx of new residents?
According to strata property development specialist, Warren Livesey, the answer could be airspace.
Mr Livesey is the founder of Buy Airspace, a company which specialises in buying, selling, and developing strata roof spaces.
He believes when it comes to the future of housing, the only way is up.
Mr Livesey explained, at present Australia is poised to admit large numbers of immigrants to kickstart the post-COVID economy.
“The New South Wales public service recently advised Premier Dominic Perrottet to admit two million immigrants over the next five years in that state alone – which would be the equivalent of adding another Perth to the population,” he said.
“Furthermore, before COVID, Australia’s population was growing by 1.5 per cent per year, according to the Australian Bureau of Statistics, with 79 per cent of that growth occurring in the capital cities.
“So Australia’s capital cities are likely to get a large influx of new residents.”
Mr Livesey said most capital city residents wanted to live in the inner and middle rings.
“However, all that land has already been taken or is too valuable,” he said.
Citing recent CoreLogic data, Mr Livesey noted the recent property boom had seen prices across the combined capital cities soar by 20.8 per cent over the year to October.
“As a result, the only way to fit more people into those suburbs is to build up,” he said.
He explained this could partly be achieved by replacing houses with apartment blocks, but said utilising the airspace above existing strata buildings could be a viable and potentially more popular alternative.
“Airspace development involves taking the unused roof space in strata complexes and using it to build new properties. I’m convinced it’s going to be the big real estate trend of this decade,” he said.
“With land at a premium and in short supply, this empty space is becoming an increasingly valuable asset – something many strata owners will soon realise.
“Think how many unused roof spaces there are in our capital cities – all of which can potentially be developed into top-floor apartments.
“Rather than letting it go to waste, strata owners will increasingly capitalise on this airspace – especially when they see other developments go up around them.”
Strata owners can sell their airspace to investors or group together and undertake the project themselves. Either way, Mr Livesey said it could be a win-win for all involved.
“The developer gets a valuable piece of land they can turn into top-floor apartments – often with stunning views,” he said.
“Penthouses are also typically cheaper to build than apartments at lower levels as the foundations, services and access points are already there. So they only require lightweight construction.
“Strata owners can use the proceeds from the sale to pay for repairs and maintenance of their building.”
However, Mr Livesey said that for airspace developments to go ahead, strata owners required council approval and also support from their fellow residents.
In New South Wales, for example, a project can be approved only if it’s supported by at least 75 per cent of the owners.