A recovery to high-rise apartment development led by softer lending criteria will be crucial to the future of the architecture profession, an industry expert told Architecture & Design.
“Banks are standing in the way of higher density developments by lending on terms that makes them not viable,” Urban Taskforce CEO, Aaron Gadiel said.
Recent figures from the Australian Bureau of Statistics show just $288 million worth of apartment projects were approved for developments greater than four storeys in April 2009.
Apartment development has slowed to alarming levels as banks become more selective with lending to reduce their exposure to high-risk projects, Gadiel said.
“Lending has virtually dried up, but significant shortfalls in supply [for residential developments] cannot recover unless banks deliver funding.”
Gadiel said architects, designers, builders and contractors are feeling the heat as apartment development continues to slow.
“Architects need the apartment sector to be kick started to provide much needed work and stimulate the industry,” he said.
Gadiel expects any recovery will be led by residential development.
“High density projects, such as apartment developments, are the most practical solution to address housing shortages and deliver maximum return to developers,” he said.
While the short-term outlook is still shaky, Gadiel is optimistic lending difficulties will ease as debt markets stabilise.
“Shortfalls in the high-rise apartment sector will only be a short-term problem and will recover alongside the economy,” he said.
With housing prices on the rise in Victoria, Queensland and NSW, Gadiel said the sector is “looking up”.
