The long-held belief that houses consistently outperform apartments in capital growth is changing. More evidence is emerging to show that attached dwellings like apartments are proving to be strong contenders against houses in the property market.

For years, it was assumed that land content drove property values, which gave houses an edge over apartments. However, it’s becoming clear that apartments offer unique qualities that are attracting more buyers, making us rethink this outdated idea.

I recently read the Housing Affordability Report from CoreLogic and ANZ, which showed that over the three months to October 2024, unit prices in Australia’s capital cities grew more than house prices. While the difference was small, it’s part of a growing trend where apartments are gaining ground.

In October, the median price growth for units was higher than houses across the five largest cities and the regional markets. This trend was consistent throughout the quarter.

Over the past year, units have shown stronger price growth than houses in Brisbane, Adelaide, and Perth – the three cities leading market growth. The same pattern is seen in regional areas across Queensland, Western Australia, New South Wales, and Victoria.

CoreLogic’s annual data shows median unit prices rose 18% in Adelaide, 19% in Brisbane, and an impressive 24% in Perth. These figures make it hard to argue that apartments don’t perform when it comes to capital growth.

There are also more suburbs across Australia where unit price growth outpaces houses. In Noosa Heads on the Sunshine Coast, for instance, five-year annual growth averages 10% for houses and 17% for units. Similarly, in Surfers Paradise on the Gold Coast, houses show 8% growth per year while units reach 12%. These patterns are appearing in many places nationwide.

I found it interesting that REA Group, the publisher of realestate.com.au, has been highlighting suburbs where units are outperforming houses.

Megan Lieu, an Economic Analyst at REA Group, said, “Historically, house values have risen faster than units, but with affordability pressures, more homebuyers are turning to apartments.

In some suburbs, unit prices have grown at more than double the rate of houses over the past year.”

It’s clear that apartments, with their affordability and lifestyle appeal, are becoming an increasingly attractive option for Australian buyers, reshaping the property market.