Yahoo Finance Sydney suburbs where apartment prices rose MORE than houses
Houses are usually the end goal for Aussie home-buyers, but in some Sydney suburbs, apartment prices are going faster than those of houses.
Where there were enough sales of both houses and units, unit prices in some suburbs posted stronger growth in the year to March than houses, according to Domain.
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Places like Caringbah, for example have seen a 3.6 per cent growth in the median price of units, while houses have seen a whopping 16.1 per cent decline.
North Bondi has similarly seen a huge decline in the median price of houses (-16.4 per cent), but units have enjoyed a 1.3 per cent increase in the median house price.
Lindfield, Ryde and Fairfield were also among the suburbs where apartment prices grew more than houses.
Alexandria, Botany, Castle Hill, Cremorne, Gladesville, Lidcome, Miranda, Rose Bay, Strathfield and Sutherland were among the suburbs where both houses and units declined in price, but houses fell further.
Why are apartment prices growing?
Domain’s research analyst, Eliza Owen, told Yahoo Finance that houses in those areas experienced a bubble, and are now in decline.
As that bubble popped, in contrast, units have enjoyed modest growth, potentially supported by first-home buyers at the lower end of the market.
And while Owen says that over longer periods of time houses have actually performed better, this recent pick up in unit price is due to housing affordability.
“House prices were very high and have seen more of a correction, whereas the unit market has done relatively well, I think because of lower price points, which is supported by the rise of first-home buyers,” she said.
In Sydney especially, house prices are eye-watering, so Owen says it isn’t surprising to see this increase in unit price growth.
“Houses in North Bondi are more than twice the price of a typical unit, whereas across Sydney its about 40 per cent,” she says. “So it makes sense that there might be higher demand in this kind of lower-priced stock,” she said.
Will the unit bubble pop too?
Because units haven’t seen the same price growth that house have had, Owen doesn’t see them entering bubble territory.
“With eased lending conditions and lower cash rates, and demand coming back into the market in the form of auction clearances...These sorts of things tell us that units might avoid the kind of downturn that houses have had in the last year.”
But, Owen says it’s worth noting that unit prices have generally fallen across Sydney, though not as much as houses.
So, should I be buying a unit now?
Owen says some people might find instead that now’s the time to buy a house as prices are declining.
But, she said units are becoming a more popular form of housing across Sydney, particularly because of the new infrastructure being built, like the new North West rail link.
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