For much of the past few years, houses have dramatically outperformed units in Australia’s property market. That gap is now starting to narrow, and understanding why can help buyers think about where value sits. Here’s a plain-language look at the shift.
What’s Been Happening
Since the onset of the pandemic, capital city house values rose almost three times as much as unit values, opening a wide gap between the two. But that gap is now beginning to close across most cities, as affordability pressures reshape what buyers can realistically afford.
Recent figures show the picture clearly. Over the June quarter, the national capital city median house price fell by around 0.9 per cent, while unit prices proved more resilient, easing just 0.2 per cent. Units have been holding up better as the broader market softens.
“Capital city house values rose almost 3 times as much as unit values since the onset of Covid, but the gap is narrowing across most cities,” property analysts noted.
Why the Gap Is Closing
The main driver is affordability. As house prices climbed far beyond unit prices, more buyers found themselves priced out of the detached-house market, pushing demand toward apartments, townhouses and courtyards.
Higher interest rates have sharpened this effect. With borrowing power reduced, the more affordable end of the market, where units sit, has become relatively more attractive. For much of 2025, unit prices recorded stronger growth as a result.
What This Means for Buyers
For buyers, the shift creates a window worth considering. As the price gap narrows, some analysts point out that well-located, established apartments can now be bought at prices that look reasonable relative to the cost of building new.
Units also open the door to suburbs and locations that would be out of reach as a house purchase, letting buyers prioritise position over land size. For first home buyers especially, this can be the difference between owning and continuing to rent.
That said, unit buying comes with its own considerations, from strata costs to building quality, so doing your homework on the specific property and complex matters. This is general information, not financial advice.
The Bigger Picture
The narrowing gap reflects a broader rebalancing in the market as affordability constraints bite. Over the long term, the fundamentals that drive property values, population growth, housing undersupply and Australia’s wealth trajectory, remain in place. But in the current environment, more Australians are trading backyards for balconies, and the relative value of units is a trend worth watching.
Epik Wire covers the Australian property market in plain language for buyers and owners. Subscribe to our newsletter to stay informed.
