If you’ve been following the Australian property market, you can’t help but notice the growing gap between house and unit prices. This trend is not new, as we have seen the growth of house prices outpacing units since late 2021.
But why have houses experienced more growth compared to units?
One significant factor contributing to this trend is the changing preferences of buyers. Since the pandemic, more people are looking for properties with larger living spaces and outdoor areas. With the rise of remote work, homeowners now value having things like dedicated workspaces as essential features to have in their homes.
Another factor is the supply and demand dynamics in the market.
Pandemic lockdowns, the closure of borders, and the decline in overseas students and workers had a detrimental impact on the inner-city unit market. This situation led to a significant increase in the supply of units, which meant that unit prices were more susceptible to falling demand.
Even though the economy and real estate market is now in full recovery mode, it is still anticipated that the gap between house and unit prices will continue to widen.