More young buyers are looking towards apartments and townhomes

Traditional detached housing prices are now ten times higher than the average wage. While this may be great news for property owners and investors, it also means homeownership is difficult for many first home buyers looking to enter the property market. 

The average annual income in Australia is $69,863, while the median house price in capital cities is $771,000. Despite this, the dream of homeownership is still strong among many. A Canstar survey of 2,124 people found homeownership was the second most common New Year’s resolution for 2022. The third most popular was to buy an investment property, with 10% of participants saying that was their primary goal for the year. 

Canstar Finance Expert Steve Michenbecker commented that the results indicate that Australians remain eager to purchase property despite high property prices. Many first home buyers are now looking towards apartments and townhomes - not only in terms of affordability but also because apartment and townhome developments generally don’t require the purchaser to compromise on their ideal location, design, or quality of build.

CoreLogic reports show that the value of Australian housing grew 1% in December last year, bringing the total increase in values to 22.1% for 2021. Across the east coast capital cities, apartment and townhome prices have risen by 10% in Canberra, 7.6% in Sydney, 7% in Brisbane and 5.9% in Melbourne. As a result, the price gap between houses and units have widened to a record high of 30% nationally.

The 2021/2022 McGrath Projects Spring Report shows that more young buyers are now looking to enter the property ladder through an apartment or townhouse purchase. The report also advises buyers to “stay away from ‘typical’ apartments. Look for bigger floorplans and a good aspect and some unique features, such as a great outlook, a garden area on the title or an extra car space. Apartments and townhouses are not the ‘poor cousins’ of houses. In fact, most modern developments offer amazing garden apartments that give you a house-like lifestyle at a lower cost.”

These elements are becoming more common in new off-the-plan developments, driven by more young families and downsizers entering the market. 

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