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Aussie dream downsized

  Dreams and realities connect. (Image courtesy of ©iStockphoto.com/pamspix)
  Dreams and realities connect.*
Owning a big house with a yard has always been a dream for Australians, both in terms of a financial and aspirational investment. However, recent statistics reveal that the trend for home ownership has been changing; Australians are downsizing the dream from a house to an apartment.

Bureau of Statistics figures reveal that there are just 1.6 houses approved for development for every apartment, the lowest ratio ever.

It compares to three houses approved for every apartment in the 1990s.

Moreover, the home building figure released this summer has shown a 36% increase in apartment and town house volumes in the past year to June.

A "Being Australian" study conducted by the Ipsos Mackay Report, a long-running social studies project, found that people are "redefining the dream to overcome the housing affordability issue".

With average house price in the state capitals being equivalent to more than seven years of an average income, some people are even forced to accept rental apartments instead of buying their own houses.

The broader demographic shifts are also reasons for the increasing demand for apartments.

In the 2006 national census, there were 2.4 people per home, compared with 3.2 people 40 years ago. This fits an analysis by the Bureau of Statistics last year that forecasts that single-person households will increase to 3.1 millions (30%) of all households by 2026.

According to the census, single-person households, one-parent families and couples without children are increasing.

But the increasing trend for apartment ownership still shows that there are only 22.5% of households living in medium- or high-density housing.

This is mainly because of short supply in the market due to the limited approval of apartment constructions. There's a widely-held belief that if more construction-friendly planning laws are passed, the high apartment demand in the capital cities can drive a building boom.

Evidently, governments in different cities are approving more apartment constructions. Over the past two years, 20,000 high- and medium-rise apartments were approved in Melbourne, for instance.

Hong Kong supplier impact

Hong Kong opportunities rising. (Image courtesy of ©iStockphoto.com/dreamtimestudio)  
Hong Kong opportunities rising.♦  
The changing concept of home ownership among Australians can certainly impact on Hong Kong businesses.

Big name developers such as Frasers Property Australia are bringing in different interior design companies both at a local and international level to do apartment fit-outs.

Since Hong Kong already has an international reputation for interior design, this latest Aussie dream could turn into real business outcomes for Hong Kong firms.

Other areas of opportunity for Hong Kong include contracts for architects, design, hardware and furniture manufacturers.

The market in Australia for renovation and DIY home fit-outs has been expanding to meet demand. The local hardware market is currently estimated at around US$24.2 billion annually.

The Australian Bureau of Statistics reports that there are 4,200 hardware and building supplies retailers. This growth has seen new international retailers set up in Australia.

A joint venture between North America's Lowes and Australia's Woolworths is developing a chain of hardware DIY retail stores called Masters Home Improvement. The plan is to open 150 stores to compete with rival supermarket chain Coles specialist Bunnings stores that currently hold 287 outlets.

This type of venture could provide an excellent distribution channel for any Hong Kong companies considering the Australian market or looking to grow their market share in the region.

Of other major players, Mitre 10, with 420 stores, plans to expand its product range.

Thrifty Link with 300 stores and Home Timber & Hardware with 210 stores, both provide alternative channels for growth.

At the same time the online world is proving to be a challenge. Retailers such as dealsdirect.com.au with over 7,500 big brand items and oo.com.au, with over 30,000 products, together with topbuy.com.au and dstore.com.au are expanding their reach in Australia and selling to worldwide consumers.

Hardware has scarcely exploited its "fashion" potential, with consumers able to make more frequent changes to their homes and apartments.

Many DIY consumers are buying drill bits or paint brushes every time they start a new project. Disposable hardware lines can offer opportunities for Hong Kong brands in this industry.

Other growth sectors include security, storage, solar and energy efficient products, water saving products and home leisure.

Innovative design and fit outs such as fold-out beds for tiny, single room studio apartments are rising.

Other trends include storage for bedrooms, wardrobes and stow away space savers like trays, shelves and racks for kitchens as well as ottomans for lounges.

Food manufacturers in Hong Kong that provide small package and microwavable foods can suit the needs of increasing numbers of smaller and single households.

from Peter Bosevski and Adam Wong, Sydney Office

Image courtesy of:
* ©iStockphoto.com/pamspix
♦ ©iStockphoto.com/dreamtimestudio

Contact:
Company/Government/Contact Person
Tel/Email/Web
Australian Bureau of Statistics
Tel: (61) 2-9268-4909
Web: http://www.abs.gov.au
Frasers Property Australia
Tel: (61) 2-8823-8800
Email: info@frasersproperty.com.au
Web: http://www.frasersproperty.com.au
Home Timber and Hardware
Web: http://www.homehardware.com.au
Ipsos Australia
Rebecca Huntley, Director
Tel: (61) 2-9900-5100
Email: rebecca.huntley@ipsos.com
Web: http://www.ipsos.com.au
Mitre 10 Tel: (61) 3-9703-4200
Web: http://www.mitre10.com.au
Thrifty Link Web: http://www.thriftylink.com.au
Woolworths Web: http://www.woolworths.com.au

Content provided by Hong Kong Trade Development Council
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