Newly released CoreLogic data highlights the difference between median house values and unit values across the combined capital cities has reached a record high of 45.2%, up from 16.7% in March 2020.
In Sydney, the gap is even wider at 68.4%, with the largest price disparity between houses and units found in the affluent suburbs of Bellevue Hill (more than 525%) and Vaucluse (almost 500%). In Bellevue Hill, the median house price is $9,684,557 compared to $1,547,880 for a unit, and $8,748,787 compared to $1,458,691 in Vaucluse.
The House premium in Strathfield has reached 389.7%, recording a median house value of $3,750,205 in comparison to $765,820 for a unit. In the Lower North Shore suburb of Greenwich, the house premium is 322.9% higher than apartments, with a price difference of $3,231,593 between the two. In the Inner West suburb of Homebush, houses cost 270.3% more, with a median of $2,447,924 compared to the average unit value of $661,025. In the Eastern Suburbs, house premiums in both Double Bay and Rose Bay are up close to 270%, and 257% in Upper North Shore’s Roseville.
Across the country, Canberra followed with the second biggest premium for house prices over apartment prices at 65%, then Adelaide at 58.1%, followed closely by Brisbane at 56.3%, Darwin at 55.4%, Melbourne at 55% and Perth at 49.1%. The only capital city with a reasonably narrow gap between house and unit prices was Hobart, at 29.3%.
The widening of the gap has nothing to do with a drop in unit prices, but instead the continuing increase of house prices, making it harder for first home buyers to afford ‘the Aussie dream’ of a detached family home with a backyard – i.e., a place to raise the grandchildren.
But despite the housing affordability crisis worsening, houses are still the most popular option amongst buyers, regardless of the surging price tag. Data shows that capital city house values have risen faster than unit values since the pandemic hit, and over the past year. On top of the desire for more space, recent controversies over high rise construction quality have made units less attractive while posing higher risk to potential buyers.
Still, market experts predict increased demand for medium to high-density housing at lower price points as house prices move out of reach for a growing portion of the population.
As interest rates started to rise in 2022, there was a momentary drop in house prices, but not for long. Last year, the market rebounded and then some, with prices soaring to record highs across the country. Nationally, the median house price rose by 5.4% in 2023, with Sydney recording over 11% growth peak-to-trough. While there’s widespread doubt this growth can continue long-term, for now, the difference between owning a unit vs home has never been greater.
