PRICE GAP BETWEEN APARTMENTS AND HOMES

 Article in the West Thursday 24th January 2024

Perth’s unit market has lagged behind the city’s soaring house prices for 11 consecutive quarters, creating a record price gap of 92 per cent between apartments and houses.

Domain’s House Price Report for the December quarter, released on Wednesday, shows Perth and Sydney are the only two capitals with record price gaps between units and houses.

According to the report, Perth’s median unit price of $387,218 is overwhelmingly eclipsed by its record median house price of $742,390.

Though Perth unit prices increased for the third consecutive quarter by 3.8 per cent, signalling the fasted quarterly gain in almost three years and two-year high annual growth, they continue to be outpaced by Perth’s nation-leading house price growth.

House prices shot up by 4.4 per cent in the three months to December represented the steepest quarterly increase for Perth in three years and the fastest rise of any city market. Growth continues to be propelled by positive net interstate migration, spillovers of buyers who are priced out of housing markets in other capital cities, elevated levels of overseas migrants and Australia’s tightest city rental market.

Perth, Brisbane and Adelaide recorded the largest house price gains over the December quarter, and only Canberra and Darwin saw a fall in prices over the quarter. For units, the gains were strongest in Hobart, Brisbane, Perth and Adelaide, with only Darwin declining over the quarter.

“I think it’s quite remarkable, really, because basically a house is almost twice the price of a unit in Perth,” Domain Research and Economics chief Dr Nicola Powell said.

“I think it says a lot around buyer preference and probably also speaks to the supply level of units, which has really helped to contain that price. The fact that there were 11 back-to-back quarters where Perth house prices outperformed unit prices is a lengthy stretch of time and I think it really is probably also speaks to who is active in the market, it’s likely to be people upsizing.”

According to Dr Powell, the staggering price gap between houses and units is expected to close as affordability becomes a critical factor.

“I think that there will be there will come a point in time where there will be an element that units are undervalued, and there will be a point of time where buyers will perceive that value, and we will see them back at a new record high,” She said.

“I’m not convinced it will happen in 2024 but we’ll get there. We’ve also got to consider the affordability aspect where if we’ve seen this continued growth of house prices and that strain on affordability, it diverts demand towards units because people just get priced out and they have to make a compromise on the property type and what they can actually afford.”

The report showed Churchlands recorded the highest annual change in its median house price in Perth, jumping up by a massive 49.8 per cent to $1.535 million.

Leederville, Shelley, Bullsbrook and Parmelia were also among the city’s top performing suburbs, with annual price growth above 20 per cent.

Perth’s top annual price growth suburbs 

Churchlands 49.8%

Leederville 28.7%

Shelley 23.4%

Bullsbrook 22.5%

Parmelia 22.5%

Osborne Park 22.2%

Kenwick 20.8%

Camillo 20.3%

Cooloongup 20.3%

Claremont 20.2%

Source: Domain

As I have said time and time again apartments are such good buying right now, yes they are now on the move, no you won't get one for $230-$250 (one bedroom) anymore but right now they are still under $300k so get in now dont wait.

Houses well the horse has bolted hasn't it so you either get in now or wait another year and pay another 10-13% on top.  Your choice.

MAKE YOUR OWN DECISIONS AND GIVE IT A REAL GO!!

SELLING MOSMAN PARK & THE WESTERN SUBURBS!!

KEEPING IT REAL IS OUR MOTTO!!