Affordable one-bedroom apartments had a renaissance in Melbourne last year.
New figures from planning group Urbis show apartments priced under $400,000 accounted for 12 per cent of all apartment sales in the final three months of 2018.
This was more than double the 5 per cent of sales for the same period in 2017.
Urbis director Mark Dawson said the figures in the Urbis Melbourne Apartment Essentials report reflected a wider shift to owner buyers, with 54 per cent of all apartments sold to owner-occupiers in Melbourne last year.
After initially favouring downsizers, developers were now responding to first-home buyers who accounted for a “sizeable proportion” of sales below $400,000.
“More recently you are getting first-home buyers coming back in for targeted, entry-point apartments,” Mr Dawson said.
A third of new apartments sold in the final three months of last year had one bedroom. They accounted for as little as a quarter of sales earlier in the year.
Castran Gilbert director David Howard said developers were increasingly willing to put one-bedroom pads in high-profile spots.
The Parade project in Box Hill has changed plans recently to reconfigure a series of larger two-bedroom apartments on its top floor to offer one-bedroom apartments at 11-storeys high from $479,000-$489,000.
Halcyon, a Brunswick East development that also features one-bedroom offerings on the top floor, has them priced from $399,000-$435,000.
Despite a growing demand for affordable and smaller apartments, two-bedroom apartments remained the city’s most popular choice, accounting for 60 per cent of sales, according to Urbis. One in 10 new apartments sold had three bedrooms.
And with less than 10 per cent of the apartments available for sale in the final three months of 2018 actually sold, buyers are in the driver’s seat.
“Developers are responding to that by asking what they (buyers) want and then working to provide it,” Mr Dawson said.
But there might be a timeline for buyers to make demands. Just 1800 apartments were approved in the final three months of last year as more developers turned their attention to hotels and office buildings.
The city averaged 5400 apartment approvals a quarter for the past two years.