The Gap Between House And Unit Prices At An All-time High
The gap between house and unit prices has never been greater, and increasing numbers of buyers are turning towards more affordable units.
We take a look at why eastern suburbs units are rising in popularity with all types of buyers and why investors are returning to the unit market.
Australia’s two-speed property market
Despite both house and unit prices experiencing double-digit growth over the last year, the gap between the two has never been greater. Sydney’s property price growth has been much talked about, with the median house price rising by a massive 29.8% over the year to 31 January 2022. But while Sydney’s unit prices also grew over the same period, it was at the more subdued rate of 15.4%.
Nationally, the gap between house and unit prices has hit an all-time high of 28.3%, according to CoreLogic. Here in Sydney, that gap translated to a difference between the house and unit median prices of $799,000 in December 2021, according to Domain, which is more or less double what it was exactly two years earlier. The upshot? Units are offering buyers great value.
Why are some eastern suburbs buyers opting for units and apartments over houses?
- Affordability. As house prices surge, affordability constraints are pulling demand away from houses and towards more accessibly priced units. Because units are currently so well priced when compared with houses, experts, including CoreLogic, are predicting the popularity of units will rise this year.
- Location. The old real estate adage ‘location, location, location’ still rings true, especially in the eastern suburbs. Buyers for whom location is important are increasing their options by including units and apartments in their search. For some, opting for a unit over a house is the difference between living in the eastern suburbs or moving elsewhere.
- Lifestyle. One of the primary advantages units and apartments offer is a low-maintenance lifestyle. Downsizers looking to relax, time-poor families and those who travel a lot are choosing to buy apartments to free themselves of time-consuming and expensive house and garden maintenance. When you live in an apartment, you can simply lock up and leave whenever you like.
The eastern suburbs unit and apartment market
The beauty of the eastern suburbs’ unit market is that it has something for everyone. Whether you’re a first home buyer on a limited budget, a family looking for an alternative to a house, a downsizer searching for an opulent apartment, or an investor after good returns, you’ll find what you’re looking for here. From cosy and peaceful studios to spacious family-friendly abodes and oversized luxury penthouses with sweeping views, the eastern suburbs unit market has it all.
At the prestige end of the market, eastern suburbs units are among the most valuable in the country, with units in Point Piper, Darling Point, Double Bay and Clovelly all featuring in CoreLogic’s ‘top 10 highest unit median prices in Australia’ list for 2021.
Now that our international borders have reopened, pundits are predicting the return of investors to Sydney’s unit market. After two quiet years, migration is back on the cards. As most people rent when they first arrive, demand for rental units in Sydney is set to rise, and investor activity along with it. This, in turn, could be a catalyst for further gains in unit prices.
If you’re looking to buy, sell or invest in a unit or apartment in the eastern suburbs, get in touch with our team today.