The desire for a house, over an apartment, has risen exponentially since the pandemic started, with new data showing a never before seen seismic gap between unit and house prices.
In Sydney the gap between apartments and house prices has now ballooned by an extra 32% in the last six months alone, while in Canberra the median house is now more than double the median apartment, with the gap increasing by a staggering 47% in 6 months according to the new data put together by national agency Upside Realty.
Upside Realty director of sales James Kirkland said a lot of families would love to buy a house, but in the current Sydney market it costs an additional $600K to get a house, over an apartment - a year ago that was $400K.
“The gap between units and houses has now widened in Sydney by more than $200K in a single year. This has been mirrored across the country, with Canberra also showing a $178K gap in that same time.”
“COVID-19 and the lockdowns have driven unprecedented desire for extra space and a backyard, so the housing market has increased at a much greater pace than units - more than we have ever seen before,” said Mr Kirkland.
Back in December the median house price in Sydney was just over $1.2M, six months later it has skyrocketed to more than $1.4M; whereas apartments have only risen from $735K to $786K during that time.
“Historically both apartment and house prices have increased in value at the same rate.”
“The last time we saw such a significant change in the gap between the two was a decrease in the gap between December 2017 and March 2019, but still the change in that time was only $100K and it was over 18 months.”
“We are now seeing a change in the gap more than double that, in the last six months alone.”
“This clearly indicates that apartments are undervalued right now.”
“A young family with one child would be looking at paying at least $1.2M upwards for an old house, most likely needing work across large parts of Sydney. Yet they can get a very nice apartment in the same area for under $1M - and they are saving $200-$300K.”
“Families are being lured by an extra bedroom and extra space, finding themselves moving further and further away from where they work, or their kids go to school, and where they have family and friends.”
“A quality post code will yield better results long term than moving five suburbs away from where you want to be, because that’s where you can afford a house.”
“In the short term we think this gain is going to continue widening, but ultimately it’s an artificial one - we won’t be working from home forever.”
“There’s going to be a big shift in the long run.”
This seismic gap between house and unit prices has been mirrored in all capital cities across the country in the last six months:
Sydney price gap between units and apartments up 32% - now $152,531
Melbourne price gap between units and apartments up 21% - now $77,406
Canberra price gap between units and apartments up 47% - now $163,785
Brisbane price gap between units and apartments up 28% - now $61,848
