This paper addresses a new phenomenon in New Zealand—the growing demand for residence within the central business district. The construction of inner-city apartments has seen a ready response by local authorities keen to rejuvenate a demand for downtown services, by developers facing a slow-down in suburban growth and by absentee owners as well as owner-occupiers seeking to broaden their residential portfolios. The paper argues that, although we are witness to the emergence of a new and different housing sub-market, the inner-city apartment is in fact a natural extension of an existing demand for residence close to the city; its recent appearance as inner-city apartments is simply a reflection of the competition for inner-city land rather than the revealed preference of buyers for a wholly different type of housing. Far from turning their back on the single-dwelling unit, most apartment buyers seek dwelling attributes similar to those of their single-unit, suburban counterparts. What is unique to this new sub-market therefore is its location. The inner-city apartment is primarily a geographical reaction to the marked physical separation of residence, paid work and live entertainment which characterises the suburb rather than a switch of preference for a wholly new residential form. Although these are quite distinct housing forms, there remain strong market connections between the inner-city apartment and detached, single-unit dwellings in the suburbs. Fashionable though these new apartment units are, New Zealand housing continues to be dominated by low-density, suburban, single-unit dwellings.
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