Apartment living has edge over living in the 'burbs: Reserve The golden age of outer-suburban housing booms may have gone for good, with signs that consumer preferences are now shifting to favour inner-city apartments, a senior Reserve Bank official says. Christopher Kent, assistant governor for the economy, challenged the industry view that government charges and planning delays are to blame for the long slump in outer suburban development, suggesting it could be due to a lasting shift in demand. Dr Kent said the modest recovery in housing approvals over 2012-13 had come almost entirely from new apartments and other redevelopments, as the inner city and outer suburban markets had gone in different directions. "Building approvals for detached houses are currently at levels seen during the low points of previous cyclical downturns," he said. Approvals for higher-density housing are at, or even above, previous cyclical peaks. While in Melbourne there were signs that the supply of inner-city apartments might have shot ahead of demand, in Sydney the inner and middle suburbs have experienced "a larger and more substantial pick-up in approvals ... than in outer Sydney and the rest of the state." He told the Australian Institute of Building there were three reasons to think buyers might have changed their preferences to favour higher-density housing closer in: The growth in house prices since the 1990s has been mostly due to the soaring price of land, which gives home buyers an incentive to economise on their use of land - by living in higher-density homes. The attraction of living in the outer suburbs has fallen with increased congestion and the increased distance from the city. Changes in society's tastes might have led people to put a higher value on living close to the city and all its infrastructure, compared to living on the fringe. Dr Kent challenged the industry's habit of blaming state and local governments for the decline in outer suburban development. He noted that whatever impediments were created by developer charges and planning delays, they did not stop activity surging in 2009-10 when low interest rates and first home buyers' grants were on offer. He predicted the home building recovery would continue this year.