Unit markets surge on lifestyle demand, infrastructure and investor appeal
Apartment markets across Australia’s capital cities are outpacing houses in terms of annual price growth, new research has shown, challenging long-standing beliefs about property investment preferences.
A joint analysis by Nuestar and Hotspotting, covering the 12 months to May 2025, found that nearly 63% of apartment markets in capital city local government areas saw higher or equal median price growth compared to houses.
“The common view is that the real money is in land, not apartments. However, that’s not our experience,” said Michael Wilkins (pictured above left), founder and director of property at Nuestar. “With lifestyle benefits, lower costs, and outstanding locations, apartments are fast becoming the preferred choice for both homeowners and investors.”
Brisbane recorded the strongest performance, with more than three-quarters (76.3%) of its apartment markets delivering better price growth than houses. Perth followed closely at 75%, with Sydney at 71.4%. According to Wilkins, demand in Perth is being driven by affordability pressures in the detached housing market.
“While the Perth apartment market is smaller, rising house prices mean even more buyers are turning to its more affordable apartment market, with 75% recording higher apartment price growth than house price growth in the past 12 months,” he said.
Wilkins added that strong-performing apartment developments tend to be located near job centres, infrastructure, and public transport, with additional upside in areas undergoing urban renewal.
“The prices per square metre are continuing to rise, and developers are recognising that quality design, premium inclusions, and integrated amenity are increasingly the key to market appeal,” he said.
Terry Ryder (pictured above right), director at Hotspotting, noted that the trend spans the country, with national apartment sales reaching 154,928 in the past year.
“The demand for apartments is expected to continue rising, driven by affordability, lifestyle preferences, and investment opportunities,” Ryder said, pointing to inner Brisbane as a standout market, supported by major infrastructure investment and preparations for the 2032 Olympics.
Wilkins cited specific examples in Perth where apartments have outperformed houses in both capital growth and rental returns. In Como, median unit prices climbed 27% in the past year, compared to 21% for houses. Yields also skewed higher for apartments. In nearby Maylands, units rose by 21%, while houses grew 16%, with yields for apartments reaching 6.5% versus 3.9% for houses.
Ryder stated that with rental vacancies remaining low, apartment values are likely to continue gaining ground against houses in 2025. “The once dominant paradigm of real estate – that houses on land showed superior capital growth to apartments – is simply no longer the case,” he said.
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