no-hope-for-unit-owners
  • National housing values increased 22.9% in the 12 months to September, while unit values only saw a 12% lift
  • The gap between median house and unit values continued to trend at record highs
  • Mosman Park in Perth has the biggest difference, with the median unit value accounting for 21.4% of the standard house value

Those looking to upgrade from an apartment to a house may find it difficult to do so, according to CoreLogic’s new findings.

The statistics show apartment owners in the current market would be able to put less towards a house than they could five years ago.

With Australian dwelling values rising 20.3% in the year to September, some recent home sellers have found it difficult to re-enter the market once they have sold.

National housing values increased 22.9% in the 12 months to September, while unit values only saw a 12% lift.

Similarly, the gap between median house and unit values continued to trend at record highs through September 2021, with typical capital city house values sitting 34.4% higher than unit values.

Another recent analysis, by CoreLogic in June, saw which LGAs have the biggest difference between house and unit values, which could see quite a challenge for apartment owners looking to upgrade to houses in the same area.

Units expressed as a portion of housing values

CoreLogic-unit-v-house

CoreLogic, 2021

Mosman Park in Perth has the biggest difference, with the median unit value accounting for 21.4% of the standard house value.

Low ratios could also be seen across Strathfield in Sydney, where unit values account for just 23% of house values, and Mosman (Sydney) 24.5%.

CoreLogic said the trend is more expensive dwelling markets, particularly in the house segment, tend to correlate with the least amount of purchasing power from units. Otherwise, more desirable housing markets.

Evident in Sydney markets like Strathfield, and Melbourne markets like Port Philip and Stonnington, LGAs with higher levels of unit stock as a proportion of total housing stock generally had a lower value relative to houses.

The dynamic is not necessarily bad for buyers as the flipside of a lower proportion of housing stock is a higher density of relatively cheap stock, which accommodates greater socioeconomic diversity for living closer to the CBD, said CoreLogic.

LGAs across Hobart, Darwin, and Brisbane generally had lower gaps between house and unit values, though other reasons may be at play.

Across Greater Hobart, units are generally high in demand but low in supply which may be attributed to a more mature aged demographic looking to downsize or lower maintenance options.

Hobart

CoreLogic said it estimates the vast majority of Hobart units are owned by investors, and units may be in high demand as the short-term rental accommodation markets hold strong amid an uplift in domestic tourism.

Brighton in Hobart, Playford in Adelaide, and the Blue Mountains in Sydney, are areas where units were more comparable to house values with relatively low concentrations of unit stock and on the periphery of major cities.

CoreLogic said unit purchases could become more popular in the future as demand is deflected away from houses due to affordability difficulties becoming more pressing, especially across the detached housing sector where values have risen substantially more than units.

With investment activity picking up, interest in medium to high density styles of housing could lift as investment demand has historically been skewed towards the unit sector.



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