Value growth for houses has been outpacing units and in the most expensive suburbs the differential can be significant.
You only have to drive around our major capital cities to see that a construction boom is taking place. The other thing you’ll notice across most of these cities is that a greater proportion of this new development is focussed on units, particularly higher density projects in inner city areas.
The search for housing affordability, strong demand from overseas buyers and heightened investment activity means that there is growing demand for units. Although Australians still tend to prefer detached houses, units allow people to live in the areas that they want however, the cost of ownership is typically significantly lower for a unit. Sure units don’t always come with the same appeal as a house for most households but more and more buyers are realising they are a viable alternative.
Many of these units, particularly in inner city areas are owned by investors. These units generally offer higher rental returns than houses and are usually a popular choice of younger renters who are attracted to the inner city lifestyle.
At a national level the greatest differential between house and unit values is found in Centennial Park Sydney. In the suburb, the median house value is 752% greater than the median unit value.
Top 10 suburbs with the greatest difference between house and unit values
The following provides a brief run-down of the results across each state.
NSW: All of the suburbs listed have a median house value above $1 million while unit values in most instances are below that benchmark. Bar Beach is the only suburb outside of Sydney.
Vic: The 10 suburbs listed are all situated in Melbourne and all have a median house value of more than $1 million. While house values are in excess of $1 million, unit values are below $700,000 in each suburb.
Qld: Only half of the 10 suburbs listed are in Brisbane, with the Gold Coast featuring predominantly on the list. Unlike Sydney and Melbourne lists, only half of the suburbs have a median house value of more than $1 million.
SA: 9 of the 10 suburbs listed have a median house value of more than $1 million. All of the suburbs listed are within Adelaide.
WA: All of the suburbs listed are located within Perth and 8 of the 10 have a median house value in excess of $1 million.
Tas: Only 5 of the 10 suburbs listed are within Hobart. The Hobart suburbs are some of the city’s most expensive while the other suburbs are relatively affordable for houses but have much more affordable unit values.
NT: All of the suburbs listed are either in Darwin or Alice Springs. Each of the suburbs are amongst the most expensive for houses in each city.
ACT: The suburbs listed are amongst Canberra’s most expensive housing suburbs. They are all long established suburbs in the inner city area.
Article by Cameron Kusher, CoreLogic RP Data senior research analyst.