Over the past two years, demand for units, especially in metropolitan areas, has declined as Australians flock to the region in search of space and lifestyle. That trend now seems to be reversing.
Inquiries from apartment buyers surged in March, primarily driven by rising demand for metro properties.
Unit inquiries at realestate.com.au increased by 16.6% compared to March last year, while housing inquiries decreased by 4.4% and land inquiries decreased by 5.1% over the same period.
Last month, the number of units accounted for almost one-third (32.8%) of the total number of inquiries, the largest share since March 2020.
With official rate hikes imminent, homebuyers may already be looking for more affordable home options.
Investors are also growing as part of the story, with international students and immigrants returning home, and low rent vacancy rates for 16 years, making apartments in the city center more desirable.
This is a similar trend in the rental market, where demand for rental units has increased more than housing over the past year.
To analyze changes in rental demand, we compared the “views per list” from March 2021 to March 2022 at the state level. This is a metric that measures the average number of times a rental property listed on realestate.com.au is displayed.
All units listed in Melbourne, Sydney, Brisbane and Adelaide have increased their views by more than 100% during that period.
This growth far outweighs the increase in housing demand in the same capital. This could also have been caused by the opening of the border and the people returning for work from the area.
More insights from a team of PropTrack experts:
Demand for units in the most populous cities has also grown faster than demand for units in the regions listed for rent.
With the reopening of offices, the return of students and migrants, and the decline in affordable housing, demand for units in both the rental and purchase markets is expected to continue to grow throughout the year.
This can mean a relative increase in the cost of purchasing a unit compared to a home.