Unit growth outpaces houses in Brisbane, Adelaide and Perth gaining ground

Unit markets in smaller Australian capital cities are experiencing strong growth, outpacing house price increases in some areas, according to new research by Nuestar and Hotspotting.

Key findings include:

• Brisbane’s median unit price rose 17% over the year to July, compared to 13.4% for houses
• Perth’s median unit price increased by over 20% in the same period
• Adelaide’s unit prices grew 12.4%, slightly below its house price growth of 15.5%

Michael Wilkins, Nuestar Founder & Director of Property, highlighted Brisbane’s performance:

“More and more buyers are not only recognising the future capital growth possibilities of units in the Sunshine State capital, but also the opportunity to purchase in desirable locales close to the city centre at more affordable price points,” Wilkins said.

Terry Ryder, Hotspotting Director, noted the trend is not limited to Brisbane:

“These sorts of growth levels are only slightly below the performance of housing in both of these cities, with more price uplift likely on the horizon, too,” Ryder said.

The research also found:

• Sydney’s unit market is outperforming its housing market
• Outer-ring house markets in Sydney are generally subdued
• Medium-rise apartment projects of 4-8 storeys accounted for the highest number of dwelling commencements in the 15 years to 2020

Ryder predicts a shift in focus towards boutique and medium-rise projects:

“It is expected that buyers and investors will turn their focus to boutique and medium-rise projects, where the construction times are less than two years, and there is more certainty that the project will proceed within a reasonable timeframe,” he said.

The researchers suggest that early buyers in well-located boutique projects stand to benefit most from this trend.