The trend we call The Rise and Rise of Apartments has turned upside down the dominant paradigm in real estate, that houses out-perform apartments on capital growth. There is now growing evidence that attached dwellings are mounting a strong challenge to houses.

It has long been believed that land content was the big thing in driving property values and that units lacked this quality. Increasingly, it’s clear that this theory about capital growth needs to be re-considered and to acknowledge that attached dwellings like apartments have qualities that houses don’t have and which are important to growing numbers of buyers. The latest Housing Affordability Report, jointly released by CoreLogic and ANZ, has observed that capital city unit prices increased more over the three months to October 2024, than did house prices over the same period. The growth difference was small, but it’s merely the latest in a growing set of figures showing the rising performance of units. In the month of October, the median price growth for units was higher than for houses in the nation’s five biggest cities and also for the combined regions. This was also the case for the October quarter.

In annual terms, price growth has been better for units than houses in the three capital cities leading the nation on market growth – Brisbane, Adelaide and Perth. Units have also out-performed in the regional markets of Queensland, WA, NSW and Victoria. The annual growth in median unit prices, according to CoreLogic, has been 18% in Adelaide, 19% in Brisbane and 24% in Perth. Those are spectacular increases and provide compelling evidence to disprove the notion that attached dwellings don’t perform on capital growth.

There are also growing numbers of suburbs around Australia where unit price growth is higher, both in the short-term and the long-term. The Hotspotting Research Hub shows that at Noosa Heads on the Sunshine Coast, the five-year growth average is 10% per year for houses and 17% per year for units. At Surfers Paradise on the Gold Coast, it’s 8% per year for houses and 12% per year for units. There are many other similar examples across the nation.

REA Group, which publishes realestate.com.au, has recently highlighted locations where unit price growth is outpacing houses. Megan Lieu, Economic Analyst at REA Group, says: “Historically, house values have risen at a faster rate than units, but with affordability pressures, units are being preferred by many homebuyers. In certain suburbs, unit prices have grown at more than double the rate of houses over the past year.”