Buyers still going for detached houses even though units offer good value
With buyers looking for affordable housing alternatives it would be expected that the number of transactions for units would be increasing. However, that hasn’t been the case in recent times.
Even with a current national median house price of $415,000 nationally and $390,000 for units, it is clear many buyers will have some difficulty entering into home ownership.
Although today’s RP Data analysis shows that at a national level the median unit price is just $25,000 cheaper than the median house price, across the combined capital cities units are $53,000 more affordable.
Across individual capital city markets, the difference in the selling price for houses and units range from $48,000 in Melbourne to $110,000 in Sydney and Canberra. Given the significant difference in the prices of houses and units in Sydney and Canberra, it is no surprise these cities have recorded the greatest proportion of unit sales over the past year of all capital cities at 42.5% and 42.8% respectively.
The analysis also highlights the difference between median house and unit selling prices at a capital city and national level over time. The data confirms that median unit prices were consistently higher than median house prices from mid-1996 to early 2003 at a capital city level, and up until mid-2004 at a national level.
This result is partly a function of the cost of housing being significantly lower at this time but is also because units were more abundant in inner city areas and attracted premiums because of this convenience.
Over recent years, the gap between house and unit prices has increased significantly, with the difference reaching as much as $76,000 across the combined capital cities and $35,000 across the nation.
Continued next page.