By HELEN TRINCA
THE DEAL EDITOR AND ASSOCIATE EDITOR
10:51AM APRIL 20, 2023
THE TWO-BEDROOM APARTMENT – WHICH DOMINATES THE RENTAL MARKET IN THIS COUNTRY – COULD BE ON THE WAY OUT AS RENTERS LOOK FOR AN EXTRA BEDROOM AND EXTRA SPACE IN A TIGHT HOUSING MARKET.
Developers are opting to build more three-bedroom apartments as more young people are forced to share expensive rent for longer periods or choose to buy a spacious flat over more expensive houses.
James Alexander-Hatziplis, co-founder of Sydney-based Place Studio, says the demand for three-bedroom apartments has tripled in the past couple of years and now they now comprise 20-30 per cent of his design studio’s work compared with the usual 10 per cent.
“WE’RE FINDING THAT THREE BEDROOMS ARE BECOMING A DRIVER AND THEY WILL BECOME MORE SO AS PEOPLE ARE PRICED OUT OF THE HOUSING MARKET,” HE SAYS. “PEOPLE ARE STARTING TO SAY, ‘WELL MAYBE ACTUALLY I CAN ALWAYS LIVE IN AN APARTMENT IF THEY PROVIDE ME WITH ALL THESE DIFFERENT THINGS’.”
Those different things are a third bedroom that can be used as a study or an extra living room; more floor space in living areas in a three-bed apartment; rooftop cinemas and shared event spaces; spas and managed gyms. Then there are areas which allow people to work from home, more storage, and winter gardens.
According to Marie-Claire Alexander-Hatziplis, co-founder of the architectural studio which dates back to 2016 and now employs 50 people, the design emphasis is on amenities that allow people in unit blocks to have more collective experiences. As well, many renters or buyers want more contemporary finishes, less “cookie cutter” kitchens and a good flow between indoor and outdoor living.
Marie-Claire and James Alexander-Hatziplis, of Place Studios.
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Place Studio is headquartered in two terraces in trendy King St, Newtown, in inner city Sydney, and specialises in designing the interior and exterior of apartment blocks.
The duo argue that it’s a “brilliant time” for apartments with intense competition as Australian cities mature and more people are prepared to live in units, even with young children.
Says James: “Units have always obviously been extremely prevalent here (but) we’ve got quite young cities relative to elsewhere around the world.
“We like to (talk about) the Australian dream, a backyard and a house, but in very many ways, that’s a by-product of the fact that we have quite small cities and lots of land.
“What’s really happening now is that apartments aren’t going to be seen as this working class rental track, they’re becoming assets that families are holding. It’s a good moment (for our business) because the focus seems to be increasingly on the idea that housing will have to be for rental.”
James grew up in apartments, in the same block as his grandparents and says there is much to be gained by sharing amenities and mixing cultures.
“I always loved this idea of communal living,” he says. “We started doing houses and houses are lovely but … I felt that we could do more good with the service that we were developing, if we provided that expertise to a large number of people.
Marie-Claire says that in the past apartment developments were based more on building cost effective blocks rather than on design.
“They sort of lost sight of the fact that people needed to live in these buildings and actually call them a home and actually have an aesthetic consideration,” she says. “But I do think things are changing, across the board, whether that’s with builders, councils, architects, there’s more of a push for design excellence. And then, as part of that exercise, making sure that it yields from a financial point of view.”
That idea – building for yield – is key to the couple’s architectural practice. They argue that the focus should be on design for yield rather than on creating a building that is “a monument to the architect’s ego”.
Shared rooftop areas are popular attractions for apartment life.
Their business has grown over the past two years from 18 to 50 architects working on about 160 projects at any time. The work is helped enormously by the use of artificial intelligence, says James: “We should be closer to maybe 180 people in the practice, and the only way we’ve been able to optimise our efficiency is by using a suite of AI and software tools to take a lot of the mundane work out of the architecture, and really just have people drive the design. You are 50 per cent more efficient using AI because you’re reducing these very manual tasks that can be automated.”
The couple met at university and shared a design vision. Initially James worked in an architectural office and Marie-Claire was a project manager, before they decided to launch their own business.
Their team is young and almost all are back in the office after Covid, where there’s an emphasis on collective work – and a weekly all-in staff lunch.
James says there is still strong interest in architecture among young students: “There’s a creative space that people can work in, but also sort of more task driven tasks that they can work on. It’s a very good zone. It’s a place to start for young people.”
James says there has been an increase in “build to rent” properties but he is not convinced that it is very different from the way it’s always been – a developer builds, then sells off individual units to investors or owner-occupiers.
He says: “When (developers) are trying to get approvals, they say they are going to hold units in perpetuity. The reality is they’re not. The market will turn … and they’ll start selling off stock.”
He says the biggest challenge for the firm now is the exposure to “builder and developer liquidity issues”.
“That will become an issue for us, particularly as we take on larger clients,” he says. “But we always remind ourselves that we provide an essential service – housing that people need – and while there might be challenges around the price of delivery … people are still going to need places to live and if we’re providing a service that is specifically attacking those issues, around costs and value, we think we’re in a really good time. In fact, this uncertainty really can be quite beneficial for us to sort of demonstrate (what we can do).”