According to CoreLogic data, traditional detached house prices have skyrocketed in the east coast capital cities. Canberra recorded a 23.4% increase, Sydney 23%, Brisbane 17.7% and Melbourne 12.3%. While apartment and townhome prices have also risen, they remain the more affordable option for many purchasers - particularly first home buyers.
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.
In their 2021/2022 Spring Report, McGrath Projects comments that they are now seeing more young buyers looking to enter the property ladder through an apartment or townhome purchase.
The price gap between traditional detached houses and units means buyers who opt for an apartment or townhome will be likely now be purchasing a property in their ideal location, at a higher quality, without having to spend nearly as much. Therefore, the report advises "all buyers, and especially budget buyers because they're more likely to have to make compromises, is to buy high quality. That means buying above the median price."
"This is especially important with apartments because the market is much larger, so you have to prioritise uniqueness and desirability to ensure above-average capital growth for your property."
The report also advises buyers to "stay away from 'typical' apartments. Look for bigger floorplans with 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. "They want spacious interiors, a deceased sized terrace for outdoor dining and ideally, their own patch of land with some garden and lawn space for the kids."
"Developers are catering for this more and more, so you might be surprised at the quality of the home you can buy in the apartment market today."