The difference in the average price of a house and an apartment has never been bigger according to CoreLogic – but that situation may not last. This means that if you’ve been considering purchasing an apartment, now could be a good time to act.
With three capital cities now boasting $1 million-plus average house prices, combined with a predicted hike in interest rates and tightening of lender restrictions later this year, apartments look likely to start attracting even more price-conscious buyers.
Industry researcher CoreLogic speculates that apartment values may also rise faster in the short term with growing demand as buyers find themselves priced out of stand-alone houses and immigration returning now the national borders are open.
CoreLogic reported last year had the highest year-on-year rise in overall residential values since 1989 with:
- 28.3% difference in average house and unit prices
- 24.8% growth in house values in the 12 months to January
- 14.3% growth for units over the same period.
Supply is an influencing factor in the price disparity with fewer homes listed for sale causing prices to rise. Advertising for houses in capital cities is 32.7% down on the five-year average while listings for houses are off 12.5% compared with this time last year.
The advertised listings for apartments for sale is only slightly lower – down 3.7% compared with the previous 12 months and off 7.8% over the five-year average.
CoreLogic analyst Kaytlin Ezzy said the faster housing prices grow, the more attractive units become to buyers.
“It is likely affordability constraints will gradually pull some demand away from houses and towards more affordable units,” she said.
The opening of international borders and shortage of housing may also boost rental demand making it more attractive for investors to re-enter the market.
If you’ve been considering purchasing a property, now could be a good time to get your finances organised. Give us a call and we’ll be happy to help.