Price gap between houses and apartments reaches 56 per cent in Sydney
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A significant price differential between houses and apartments has emerged across Australian capital cities, according to new research from Nuestar and Hotspotting.
The median price gap between houses and apartments in Sydney has reached $632,000, representing a 56 per cent difference.
In the ACT, the difference stands at $357,000, or 45 per cent of the median house price.
“Greater affordability is encouraging a shift from houses to apartments, and higher gross yields on apartments are drawing investors back to the market,” Mr Wilkins said.
The research showed varying price gaps across other capital cities, with Melbourne recording a 39 per cent difference and Perth showing a 40 per cent differential.
“However, the primary demand is coming from owner-occupiers and downsizers with substantial equity in their large family homes, who are less impacted by higher interest rates,” Mr Wilkins said.
Supply constraints continue to affect the market, with major builders facing difficulties securing materials and trades for new apartment projects.
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Hotspotting Director Terry Ryder noted a shift in buyer preferences towards apartments, particularly in inner-city and coastal locations.
“Even in the most expensive markets, the price difference between a house and an apartment can be substantial,” Mr Ryder said.
First-home buyers are increasingly turning to apartments, especially in New South Wales and Greater Sydney, where apartment sales accounted for 33 per cent of NSW property sales in the third quarter of 2024.
“With median house prices in Sydney nearing $1.5 million, many young people fear they will never own property. However, strategically selected apartments offer an ideal solution,” Mr Wilkins said.
The national median house price currently sits at $869,000, compared to the apartment median of $661,000, representing a difference of $208,000.
Data from PropTrack revealed Brisbane’s median house-apartment price gap reached $300,000, while Adelaide recorded a difference of $223,000.
“Apartments in capital cities, suburbs, and coastal regions generally offer residents some sort of view, whether it be a water or city vista, and they are a low-maintenance way to own or rent property,” Mr Wilkins said.