Major city residential developers are targeting retirees and empty nester mums and dads who own million-dollar-plus homes in Melbourne’s established suburbs, describing them as the fastest-growing sector of the apartment market.
Giant companies like Mirvac and MAB are expanding their floor plans to accommodate cashed-up owner-occupiers seeking inner-city apartments, and have created more expensive dwellings on the upper floors of their towers to attract them.
The same trend has hit the suburbs. Little Projects’ managing director Michael Fox, who has built thousands of apartments on the city’s fringe, says although investors remain the main driver, he is creating bigger offerings on his top floors to accommodate the owner-occupier empty-nester market.
Little Projects’ high-density award-winning 24-storey* ILK development in South Yarra is one example.
It sold out quickly off the plan, with three-bedroom apartments on the upper floors going for up to $2.8 million. “We’re doing the same in our new Richmond development in Bridge Road, where the top two floors will be much bigger apartments,” Fox says.
Mirvac’s head of residential, John Carfi, says there is a vast social shift, an exodus of all age groups, towards the city. “The biggest trend we’re seeing is retirees and empty nesters who traditionally downscaled and bought in their local area,” he says.
“You’re seeing volumes in the outer suburbs diminish progressively over time, and volumes in the city increasing. People are saying they don’t want a one-hour commute to the city. They want to live there.
“Think of this. You sell your house in Hawthorn for instance. You buy a two-bedroom apartment with a study in Docklands to live in, but in the same building you buy a two or one-bedder as an investment that your children or even grandchildren might get.”
Australia 108 in Southbank, set to be the city’s highest building, has devoted the top 28 floors of its 100 storeys to owner-occupiers.
One Melbourne empty-nester mum bought five apartments in the tower for $9.3 million, then combined them into three huge homes on the same floor, one for herself and two for her adult children.
David Allt-Graham, head of residential for MAB Corporation, which is developing Docklands’ NewQuay precinct has noticed the same inflow of empty nesters, alongside a “high proportion” of young professionals.
Docklands’ proximity to the CBD means empty nesters and retirees can duck in and out of the city.
“Being in the city is pretty hectic for a lot of people,” says Allt-Graham. “I wouldn’t be planning my retirement in the middle of the city, but you want to be close and that’s what we offer.”