As the gap widens between house and unit values across Australia, CoreLogic reveals the reason for this increase.
Underlying land value, scarcity factor and desire for more space through and after the pandemic has led to a substantially larger rise in house values relative to unit values over the past four years.
At the onset of the pandemic in March 2020, the house premium, or the difference between median capital city house and unit values, was just 16.7%. Fast forward almost four years later, and that premium has jumped to 45.2% or $293,950.
CoreLogic research director, Tim Lawless, said while houses have historically attracted a price premium over units, and have shown a higher rate of capital gain, several factors have led to the accelerated value growth for detached dwellings over recent years.
Looking at this locally, at Harcourts, we studied the median house and unit prices in 2019 through to 2023. This table below also clearly illustrates this same trend of the widening gap between house and unit values.
In the table below we evaluated large Macarthur suburbs that have a good population of both houses and units:
2019 Median House Price | 2019 Median Unit Price | 2019 House Premium | 2023 Median House price | 2023 Median Unit Price | 2023 House Premium | |
Ambarvale | $539,500 | $360,000 | 33% | $777,500 | $420,000 | 46% |
Bradbury | $550,000 | $457,500 | 17% | $800,000 | $485,000 | 39% |
Leumeah | $590,000 | $364,250 | 38% | $821,000 | $460,000 | 44% |
Minto | $595,000 | $420,000 | 29% | $870,000 | $573,000 | 34% |
You can clearly see the premium for a house in Ambarvale in 2019 was 33%, and in 2023 was 46%. In Bradbury, the 2019 premium for a house over a unit was 17%, and in 2023 was 39%. In Leumeah, the premium for a house over a unit in 2019 was 38% and in 2023 was 44%. In Minto the premium for a house in 2019 was 29%, and last year was 34%.
Business owner of Harcourts The Property People, Garth Makowski said “House prices have moved out of reach for a growing portion of the population, especially those seeking a first home or lower income households. With housing affordability remaining a challenge, units are likely to become more in demand.”
For more information on this trend, click here:
