With housing affordability being such a hot topic in Sydney, the Urban Taskforce undertook some research to see if the well-meaning amenity standards that determine apartment design are partly responsible for the high cost of Sydney apartments.
The average apartment in Sydney currently costs $711,256, while the Melbourne equivalent is $459,181 according to the Domain House Price Report. The difference of $250,000 is significant. This could be related to the different costs of land between the two cities or it could be related to the different standards required by each state’s planning rules.
On 13 April this year, the Victorian Government issued its Better Apartment Design Standards in a 40-page document. This relatively simple document compares with the NSW Apartment Design Guide (ADG) which was updated a year ago and now contains 180 pages of very detailed material. While it is called a guide, the language of the document and the way it is used by planners in local councils has made it a ‘tick-the-box’ rule book that all developments must comply with.
A recent Planning Circular stressed that the ADG should not be applied as a set of strict development standards. The councils, however, will state that it is the state government setting these standards, and that as a result they must comply. The non-discretionary development standards of car parking, internal area and ceiling heights are the ones that increase costs.
So the question that must be asked is whether the NSW standards are too high and are adding to the cost of an apartment. The answer, after detailed research by a team that included HDC Planning, Turner Studio architects and quantity surveyor John Ferrarin, is that $150,000 could be saved on a typical Sydney two bed, two bath apartment if Victorian standards were used.
In essence, a typical two bed Sydney apartment that currently sells for $750,000 could be purchased for $600,000 if a number of amenity standards were relaxed to the same level that is deemed acceptable in Melbourne. The biggest difference relates to the internal area of a two bed, two bath apartment. In Sydney (NSW), there is a mandatory requirement that the size must be above 75 square metres, while in Melbourne the same rooms can be comfortably be accommodated in 65 square metres. The difference of 10 square metres at the average Sydney sale price of $10,000 per square metre would reduce the apartment price by $100,000, which is very significant. A development with 12 apartments at 75 square metres could now accommodate 14 at the smaller size. Ikea, the Swedish furniture manufacturer displays two bedroom apartments of 55 square metres in its Australian stores. New York has a program of micro-apartments to help with affordability.
- Australia – 214 square metres
- USA – 201 square metres
- Canada – 181 square metres
- Denmark – 137 square metres
- France – 112 square metres
- Japan – 95 square metres
- UK – 76 square metres
So the minimum internal area required for a NSW two bed, two bath apartment is the same as the average size of every home in the United Kingdom. Half of their homes are smaller than our minimum allowed in New South Wales.
When questions are raised about whether Australians are living beyond their means in bigger homes than are needed or can be afforded, there is a classic overreaction that the development industry is promoting ‘dog-boxes’ of tiny spaces that will have no windows that will inevitably become slums. What is needed is an understanding of what is a sustainable size for an apartment that relates amenity to affordability.
While the area of an apartment is the key determinant of its cost, there are a number of other amenity standards that are listed in NSW but not in Victoria. These include cross ventilation, building depth, solar access, open space requirements, underground car parking and ceiling heights for kitchens. These items bring a total extra cost of $157,200.
Just as the NSW Affordable Rental Housing State Environmental Planning Policy relaxes standards for areas and amenities for affordable housing projects there could be an “affordable apartments” category where minimum requirements could be reduced to lower the purchase price of an apartment. Another approach would be to define an “urban core” category where standards like solar access in mid-winter will be difficult to achieve and could therefore not apply.
If Melbourne apartments don’t require this degree of solar access, then it would seem appropriate for Sydney to have a similar standard for those wanting to live in the middle of a city.