Here are 13 graphs that give an overview of the data.
The historic growth in home prices over the past few years has been the story of a two-speed market. Home prices have grown rapidly, but home prices have grown more slowly.
Housing is usually more expensive than a unit, but in the last two decades the price difference between the value of a home in the capital and the unit has never been so extreme.
Last year’s unit prices still recorded double-digit price increases, but the increase is far behind housing and has continued since the outbreak of the pandemic.
As of March 2022, the median home price in the capital was $ 850,000, while the median unit price was $ 590,000. This shows a 44% gap, a record high.
according to PropTrack Home Price Index Since the outbreak of the pandemic, home prices across the country have risen 39% until March 2022, while home prices have risen only 16% over the same period.
Here, the impact of the pandemic on housing preferences is influential.
Lifestyle is more important, and proximity to CBD is less important. The experience of the blockade also made the life of the apartment relatively unattractive, and many wanted more space and a larger home.
For many, the pivot to remote work and the more time they spend at home have made larger homes a more attractive proposal. As a result, the premiums people paid to their homes in 2021 accelerated significantly.
Low interest rates have also provided affordable boosts for many, allowing people to repay more debt and thus increased their ability to buy homes rather than units.
Other factors that have led to the relative weakness of the apartment market are lower levels of investor participation, lower international demand, and weaker rental conditions in the city center market.
Investors play a major role here, with investor activity hitting record lows in 2020.
These changes led to a shift in preference bias towards housing, and premiums were paid for these options.
Home price premiums are the most extreme in Canberra and Sydney and currently have a price difference of over 75% between homes and units in both cities.
Look inside Brisbane’s suburbs, where home price premiums have expanded the most throughout the pandemic. Here, the price difference in the city center between homes and units has increased by 50 percent since the pandemic began.
This significant expansion illustrates the rising level of interstate movement to Queensland. Many interstate highway buyers take advantage of the relatively affordable benefits of Brisbane homes, as well as lifestyle benefits such as more sun, less traffic, and relatively less blockage time. doing.
From the beginning of the pandemic to March 2022, Brisbane’s home prices increased by a staggering 48% compared to just 15% of the unit.
In fact, the unit price gap is in the weakened urban apartment market, where there is a stagnation in international migration and a sharp decline in demand from tenants, as well as a decline in rental and buyer activity. Most notable.
But when we entered COVID-normal, many things changed.
For one thing, people are returning to CBD and foreign arrivals are trying to rent again.
Home prices have risen sharply, creating affordable constraints, and perhaps buyer demand is shifting to more affordable options in the apartment market.
The same is true for lessors whose rents have been slow to grow since the pandemic.
As the city revives at the end of the restrictions, apartment life is also returning favorably.
Reopened borders, relatively affordable prices and a tight rental market have appealed to investors.
And investment proposals for units are set to be more favorable, especially as home price rises slow down and rental price pressures are likely to improve, resulting in better rental yields.
The price cap of a home guarantee scheme is likely to mean that the first qualified home buyer prefers a unit, where there are more options.
All these factors are driving the change in the apartment market
The volume of unit inquiries at realestate.com.au has already increased by 46% year-on-year when comparing the year ended March 2021 with the year ended March 2022.
In the future, the rise in home real estate prices is expected to slow as the housing market cycle ends at its peak and rising mortgage rates weigh on buyers’ demand and real estate prices.
However, it is clear that cheaper property types are already gaining popularity among priced homebuyers and investors.
Despite the gradual rise in real estate prices, all of these factors indicate the potential for stronger performance in the unit market compared to the delays experienced since the outbreak of the pandemic.
More insights from a team of PropTrack experts: