REIA report reveals growing interest in certain types of property
Smaller homes — particularly two-bedroom units — are leading Australia’s housing market gains in both price and rental performance, new data from the Real Estate Institute of Australia (REIA) has revealed.
The REIA’s Real Estate Market Facts report for the March quarter shows that, while all dwelling categories posted increases, units and other compact dwellings are outpacing houses.
“This trend reflects changing household compositions, affordability constraints and increasing demand for more manageable, lower-maintenance housing options,” said REIA president Leanne Pilkington (pictured).
The findings are supported by a separate analysis from Nuestar and Hotspotting, which reviewed market activity across the 12 months to May 2025. Their research showed that apartment markets in capital cities are challenging the traditional dominance of bigger houses, with nearly 63% of apartment markets in capital city local government areas experiencing higher or equal median price growth.
According to REIA, the national median price for “other dwellings” — typically comprising flats and smaller townhouses — rose 1.1% during the March quarter to $702,315. While house prices increased at the same quarterly rate, unit price growth was more broadly spread across the capitals.
“Every capital city recorded an increase for this category except Canberra, where prices dipped 3.4%,” Pilkington said. “Hobart recorded the strongest quarterly growth at a 7.5% increase, while Brisbane and Perth also posted strong increases of 4.5% and 2.8%, respectively.”
The national median house price reached $1,079,017 after a 1.1% increase, led by Sydney (1.7%), Melbourne (2.7%) and Darwin (2.9%). Price declines were seen in Hobart (-1.3%), Perth and Canberra (both -1.0%).
Rental data from the report further highlights the strength of the unit market. “Weekly rents for two-bedroom dwellings rose 3.5% nationally to $648, compared to a 0.6% increase for three-bedroom houses, now at $628 per week,” Pilkington said. “Melbourne posted the strongest rise for two-bedroom rents at 8.7%, while Sydney remained stable. All other capitals posted increases ranging from 1.4% in Darwin to 4.8% in Perth.”
Vacancy rates remained tight, with Adelaide at 0.6%, Brisbane at 0.9%, and Canberra at 1.6%. Melbourne and Perth both rose to 2.5%, while Darwin had the highest vacancy rate at 2.9%.
“With price growth, rental demand and low vacancy rates converging, smaller dwellings are becoming a strategic choice for both investors and downsizers,” Pilkington added.
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