The Sydney apartment tribes reshaping the harbour city – Sydney Morning Herald

They reflect significant changes over the past decade in the way Sydney houses its population of 5.3 million. About 15 per cent of NSW's population, or 1.12 million people the vast bulk of whom are in Sydney now live in apartments, compared with 8 per cent of Victoria's population and 7 per cent of Queensland's.

Over the past decade, 258,000 apartments have been built in NSW, which translates into an extra 500,000 people living in units.

What has not been well known is exactly who lives in them. A paucity of information spurred the University of NSW's City Futures Research Centre to embark on a project to map the socio-economic make-up of people in Sydney's apartments.

It dispels common perceptions of the social fabric of Sydney's apartment dwellers. "If you look at the marketing most developers have, there is a young couple sipping chardonnay gazing over the city," said Bill Randolph, head of City Futures.

He argues it has resulted in many apartment towers built in recent decades failing to cater for the people who end up living in them. "The bulk of the stock is two-bedroom, investment-grade units. And the majority of apartments are owned by investors," he said.

The mapping identified about five groups living in the city's apartments. As Sydney's population grows, an understanding of these tribes will become crucial for determining planning policy and ultimately tailoring apartments to suit the people who call them home.

By far the largest tribe comprises the "economically engaged". They make up half the citys apartment households and their abodes tend to be east of Olympic Park in areas such as south Sydney. "Obviously if you want to be a first homebuyer in Sydney and want to live east of Strathfield, you have to be living in a flat or an apartment," Professor Randolph said.

Those in the largest tribe tend to be in full-time professional jobs, on higher incomes and from English-speaking nationalities. Most are either mortgage-holders or private renters, and their households tend not to suffer from overcrowding. The tribe has grown significantly over the past decade, swollen by the arrival of first-home buyers and private renters.

The second-largest group comprises the young, jobless or under-employed a group barely evident in the data on apartment dwellers a decade ago.

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Professor Randolph said the group dubbed "the young, un(der)employed" emerged as a result of the investor-led boom in apartment construction. It is dominated by people aged between 15 and 24, many from north-east and south-east Asian backgrounds. Group households are also over-represented and some endure overcrowding, which the research suggests means room sharing is likely to be common. Many of them work in low-paid service jobs in the central city. All up, they account for 10 per cent of apartment households.

The third-largest tribe accounts for 8 per cent of households in Sydney's apartments. This group of "battlers" and migrant families is characterised by households on low to moderate incomes, many from south and central Asia, north Africa and the Middle East.

Several years ago, Al Turnbull and Maggie Korenblium, both 31, had difficulty finding an apartment in the private rental market that would suit their growing family.

"Once you add in Sydney rent and Sydney childcare costs, you can take away what looks like middle-class earnings," Mr Turnbull said. "It can take you to the wall."

Maggie Korenblium. Al Turnbull and their young children Esme and Hamish outside their Pyrmont apartment building.Credit:Wolter Peeters

The couple had been living in a one-bedroom apartment in Petersham in the inner west for 18 months. They had just welcomed their daughter, Esme, and started to weigh their options because their apartment was too small.

"I was preparing for two very lean years," Mr Turnbull said.

Fortunately, an application they made to an affordable housing provider was accepted and they have since been able to rent a larger two-bedroom apartment at Pyrmont.

Their rent fluctuates depending on household income. "That is the thing that is the lifesaver," he said. "I'm happy to be out of the private rental market."

Tenants Union of NSW chief executive Leo Patterson-Ross said developers typically built two-bedroom apartments because they were the most profitable, which often resulted in families having to split or crowd into units because it was the only housing on offer.

"What we are not good at in Australia is finding out what the tenants want," he said.

"We don't tend to ask people what they want from their housing, and that is the real challenge. What we don't have at the bottom of the market is genuine competition. Landlords aren't having to compete with each other. It's the tenants having to compete for housing."

Older public housing tenants comprise the fourth largest tribe at 6 per cent of households in apartments. Most are single occupants, aged over 65 and are on low incomes.

Mr Patterson-Ross said the waiting list and the profile of the people on it tended to drive government strategy on public housing. "They assume that once you are on the waiting list as a single person, that you are never going to move on or have a family," he said.

More than 51,000 are on the waiting list for social housing in NSW, including more than 5000 on a "priority" list. In some cases, people can be on it for decades, and a large increase in supply will be needed to dent wait times.

"It should be that you have a waiting time of maybe a couple of months before the right kind of housing becomes vacant. That is what a healthy public housing system would look like," Mr Patterson-Ross said.

Finally, established owners and downsizers mostly those over 65 make up the smallest tribe in Sydney's apartments. They comprise just 3 per cent of households in apartments.

Peter and Lindy Blackhall downsized to an apartment from a four-bedroom house.Credit:Janie Barrett

Neutral Bay apartment owners Peter Blackhall, 72, and wife Lindy, 70, are happy down-sizers. They moved out of a four-bedroom home, which included a swimming pool, garage and lawns, about eight years ago, largely due to the large number of hours they had to spend maintaining it.

"It was just too much work," Mr Blackhall said. "We had all this room four bedrooms, two bathrooms. We weren't really utilising the facilities."

The retirees now enjoy breathtaking views of Sydney Harbour and the city skyline from their two-bedroom, two-bathroom apartment in a 50-year-old building on the lower north shore. "They will be carrying my wife and I out of this building in a box," Mr Blackhall said.

While downsizing is often talked about as a phenomenon, Professor Randolph said the number of older people who sold their houses to move into to apartments was small, and tended to be an "upmarket group" who shifted into buildings near Sydney Harbour.

Over the past decade, construction of apartment towers has transformed Sydney's skyline, especially in areas such as Rhodes, Wentworth Point, Meadowbank, Green Square and Mascot.

As the apartment market matures, Professor Randolph expects a shift away from large towers to smaller blocks. "In a sense, the apartment market might be set for a reset over the next five years, perhaps with less of a focus on the investor," he said.

"The anecdotal evidence is that developers are looking to build much more to sell to first-home buyers because the investor market has been on the nose."

The evacuation of the Opal Tower, in the foreground, two years ago due to cracking led to a shake-up of building regulations.Credit:Janie Barrett

NSW's residential construction crisis, sparked by the Opal and Mascot towers debacles, has been a blow to the apartment market. Yet two years after residents were evacuated from the Opal Tower at Olympic Park, the hope is that tighter regulations in the wake of the crisis will prevent the construction of defect-riddled apartment buildings and renew buyer confidence.

The COVID-19 pandemic is also set to reshape Sydney's apartments.

Planning Minister Rob Stokes believes the coronavirus will leave an indelible imprint on the design of apartment buildings because there will be a greater demand for living space.

"The nature of common property I think will change," he said. "Fewer touch points in common areas to ensure less capacity for transmission of communicable disease."

He agrees that there will be a greater demand for more compact, lower rise apartment buildings, "rather than soaring towers that reach for the heavens".

A greater mix of housing types is expected in Sydney over the coming years.Credit:Janie Barrett

"Over the past 10 to 20 years, there has been a very binary choice. They have been detached homes in the suburbs or massive towers. There is now more demand for products in between," he said.

While the pandemic has resulted in Sydney's population flat-lining, SGS Economics expects it to return to historical trend by 2028. It means the city's population will expand by more than 100,000 a year, and Mr Stokes is adamant that Sydney cannot afford to put the brakes on home building now, given longer-term population forecasts.

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He is eager to encourage the fledgling build-to-rent market residential buildings in which developers own all of the apartments and lease them out in business zones of the city, saying it will create more vibrant neighbourhoods in otherwise sterile commercial districts.

"The developers have the incentive to build really good-quality stuff because they are going to own it. They're going to do a proper job because they're going to be liable for defects," he said. "On so many levels, it's a win-win."

He believed build-to-rent was a tool that would help young people get a leg into the property market because it gave security of tenure for 10 to 15 years, which the general residential market tended to lack. "That gives them 10 to 15 years where they can save up a deposit, and also use negative gearing against the baby boomers," he said.

"Younger people are competing against the baby boomers to buy the homes. Here, the younger people have the opportunity to use negative gearing to buy the house they ultimately want to live in. It levels the playing field a bit. And remember, rising property values have created a massive transfer of wealth to people over the age of 55 or 60."

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Matt O'Sullivan is City Editor at The Sydney Morning Herald.

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The Sydney apartment tribes reshaping the harbour city - Sydney Morning Herald