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Unit Surge Unstoppable

Hotspotting

Release Date: 10/08/2024

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More Episodes

The biggest paradigm-changing trend in Australian real estate, the rise and rise of apartments, is confirmed by the latest price data from the usual suspects – and is reflected in our choices for the latest edition of our most popular report, the National Top 10 Best Buys report.

The latest price data from CoreLogic shows that unit prices are rising faster than house prices.

While news media, in its predictable fashion, focussed on the perceived negatives in the CoreLogic Home Value Index published in October, my analysis of the figures is that they provide further evidence that rising demand for attached dwellings is creating out-performance on price growth.

Perth still leads on growth in house prices, but the numbers for growth in unit prices are considerably stronger, both for the past month, the past quarter and the year to date.

According to CoreLogic, Perth prices rose 1.6% in September for houses but 2% for units.

In the September quarter, Perth house prices increased 4.6% but unit prices were up 6.2%. 

And, for the first nine months of 2024, house prices are up 17% but unit prices more than 20%.

It’s the same for one of the other hot city markets, Adelaide. 

House prices in Adelaide has recorded strong rises in the month of September, the September Quarter and the year to date, but unit prices have increased more in each of those time frames.

The price outcomes are even more emphatic in Brisbane: house prices rose 2.4% in the September Quarter, but unit prices rose 4.8%, exactly twice as much. And the year to date growth numbers are 10% for houses but 14% for units.

In both Sydney and Melbourne, which have not been matching the smaller cities on growth, the numbers are nevertheless stronger for units than for houses.

And nationally, median prices grew 0.4% for houses but 0.6% for units in September, while in the September Quarter houses were up 1% but units 1.2%.

The differential is greatest in the Combined Regional markets, with units outperforming houses in the month, the quarter, the year to date and in the past 12 months.

And that holds true for most of the individual state regional markets, notably Western Australia, New South Wales and South Australia. In Regional Queensland, where many regional cities have highly active markets, the numbers are fairly even.

Overall, these numbers are the latest piece of evidence that the old paradigm of real estate, that houses always outperform units on capital growth, is changing and in many locations HAS changed.

As we comment in the report we recently published with marketing company Nuestar, the one we call The Rise and Rise of Apartments, there is growing buyer demand for attached dwellings across Australia.

Units now accounts for more than half of all sales in the Sydney market and they have a growing market share in Melbourne, Brisbane and Canberra as well.

In the booming Perth market, where houses are no longer the cheapest in capital city Australia following massive price growth recently, more and more buyers are pivoting to the more affordable and often better located unit products in the market.

And now this compelling trend in national real estate is a big influence on our choices to the nominated locations for the new edition of the National Top 10 Best Buys. 

Many of the nation’s strongest locations for unit demand are prominent in this report – as well as some of the most vibrant house markets in key locations across Australia.