Apartment sales climb as buyers eye government home guarantee
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Australia’s apartment market is experiencing a significant resurgence, fuelled by affordability pressures, shifting buyer preferences, and the promise of expanded government support, according to recent research. The analysis by Nuestar and Hotspotting shows that 42% of all property transactions nationally—equating to 163,246 sales—were apartments in the year to August 2025. This underscores a notable shift in buyer behaviour as apartments become increasingly attractive.
The momentum is expected to accelerate with the launch of the expanded First Home Guarantee Scheme, which took effect on Wednesday, 1 October. This scheme is designed to unlock opportunities for thousands of homebuyers, particularly in urban areas where apartments offer a more affordable entry point, according to Michael Wilkins, Founder and Director of Property at Nuestar.
“The impact will be both immediate and far-reaching with the combination of increased borrowing capacity and reduced upfront costs set to supercharge demand in the apartment sector,” explained Mr Wilkins. “We anticipate a surge in unit sales with pent-up demand and improved affordability likely to translate into upward pressure on prices, particularly in areas where supply is constrained.”
However, Mr Wilkins cautioned that homebuyers and investors must ensure they are working with credible developers with proven track records and relevant accreditations. “For example, the Independent Construction Industry Rating Tool (iCIRT) and Latent Defects Insurance (LDI) give homebuyers, especially in New South Wales, greater confidence by independently verifying the credibility of developers and guaranteeing protection against serious building defects,” he said.
The new research highlights strong momentum already building in the apartment sector, driven by affordability and lifestyle appeal. Key metropolitan areas such as Sydney’s western corridor, along with several coastal markets, are seeing increased buyer interest. “This isn’t just a capital city story because it’s playing out in lifestyle and regional hubs like the Gold Coast, Gosford, Newcastle and Wollongong as well,” Mr Wilkins noted. “It’s vital that buyers always prioritise location, and not just affordability, to ensure solid capital growth over the medium- to long-term.”
In Sydney, apartment sales increased from 48% to 51% of total transactions over the past two quarters, partly due to mounting affordability pressures in the detached housing market, according to the report. Melbourne’s unit market share climbed from 34% to 37% in six months, with the city recording its highest quarterly apartment sales since the 2021 boom.
“Brisbane has also seen notable growth, with units now accounting for 42% of all sales,” Mr Wilkins added. “Suburbs such as Fortitude Valley, Indooroopilly and Windsor are leading the charge, driven by proximity to transport, education and lifestyle precincts.”
Terry Ryder, Director of Hotspotting, echoed these sentiments, attributing the rising share of unit sales across the capitals to affordability. “Affordability is the key driver because, in many of these markets, apartments are the only viable option for buyers priced out of the housing sector, which is why we’re seeing such strong uptake in places like Brisbane and Canberra,” Mr Ryder said.
On the Gold Coast, unit sales increased from 47% to 51% of the overall market, while Canberra saw a jump from 31% to 40%, signalling renewed interest in the capital’s apartment market. Darwin’s unit share rose from 31% to 36%, further illustrating the shift.
Mr Ryder pointed out that the data indicates a broader market shift, with units no longer just a compromise. “They’re becoming the strategic choice for buyers who want location, lifestyle and long-term value,” he said.
The report also reveals that in Greater Sydney, 53.24% of apartment sales in the second quarter of this year were to first home buyers, up from 51.66% in the previous quarter. Mr Wilkins noted that this upward trend reflects the growing appeal of units as a strategic and affordable pathway into home ownership. “With developers increasingly focused on build-to-rent models and construction costs remaining high, new supply is limited,” he said. “Combined with higher gross yields and government support, this supply-demand imbalance is expected to intensify competition and drive further price growth in the unit sector.”
As the apartment market continues to evolve, the expanded First Home Guarantee Scheme is poised to play a pivotal role in shaping the landscape for first-time buyers and investors alike.