The great Australian dream of owning a detached house in a city with a decent garden and a barbeque and perhaps even a pool but near central facilities is becoming a thing of the past, new research suggests.

For the better part of 60 years, the cornerstone of success was the idea of owning a detached house on a quarter piece of land and all the associated trimmings, but a rising population and growing house and land prices have affected that image with apartments and high rise living becoming more popular.

Melbourne ApartmentsIndeed, a combination of factors including affordability constraints, land scarcity and people becoming more focused on lifestyle and convenience has changed what people in Australia want, according to a new study from international real estate firm Knight Frank.

With Australia's population growing from around seven million in 1940 to 24 million today, not everyone can afford to live the dream, it suggests. The trade-off has been to swap a backyard for a balcony as recent population growth has seen property design growing vertically as much as outwards in close proximity to employment, educational, transport and recreational amenities.

The study points out that the latest data from the Australian Bureau of Statistics (ABS) shows that 50% of all new housing approvals nationally in the 12 months to July 2016 were for apartments, well above the 30-year average of 32% and the 24% recorded in the 2011 Census.

Although there are emerging signs that approval numbers are beginning to trend downward, they remain close to historical highs where nationally there were almost 235,000 dwellings approved in the 12 months to July 2016, up 35% from the 10-year average.

'Notably, this pick-up has been underpinned by high rise apartments of four plus storeys in the capital cities of the eastern states, largely stemming from rising land costs which has forced developers to maximise the number of apartments they add to a site,' the report says.

Knight Frank believes that the surge in apartment construction since early 2012 and the increased cost of housing will further reshape the great Australian dream in years to come.

'This trend has already become apparent over the past 50 years where in 1961 medium and high density dwellings represented just over 10% of all dwellings. The 1970s apartment boom increased this proportion up to 18.7% by 1981 while at the 2011 Census the representation was just below 25%. With apartment construction being at historical highs, Knight Frank Research anticipates this share could jump to around 29%, possibly even higher,' the report points out.

Younger adults, in particular persons aged between 18 and 35, have embraced higher density living where 28% in either a medium or high density dwelling at the 2011 Census, even higher for 26 to 30 year olds, compared with 18% for the broader population.

The report explains that children change this dynamic entirely with the rate significantly declining from age 30 as people begin to start families and hence the higher proportion of babies living in an apartment.

Similarly, empty nester households, those where the children have left home, are also a driving force behind the increased demand for apartments where many seek to cash-out of an oversized dwelling to a more centrally located and secure apartment or age appropriate housing. Also, the proportion of persons living in an apartment increases significantly from age 70.

With a further 14 million people expected to call Australia home by 2050 and 83% of these anticipated to gravitate towards the capital cities, a lack of detached housing options will direct these people to the apartment market instead, the report also suggests as has been seen in cities like New York, London, Tokyo and Hong Kong. In particular Sydney and Melbourne are heading further down this path.

'Ultimately, we expect the decline in 30 year olds and older trading up to a detached house to moderate over the next two decades. This outlook is based on further affordability constraints and people who have become more accustomed to apartment living as they favour the convenience and lifestyle that this form of housing offers,' the report points out.

'However, proximity to local parks and amenities will be key, particularly once children come into the picture. So in short, owning a home is still very much a goal for many Australians. However, what that home looks like is very different to what older generations perceive it to be with the backyard cricket pitch being replaced by the communal garden,' it concludes.