Record house premium compared to units highlights changing market dynamics
The difference in price between houses and units in Australia’s major cities has reached a new peak, with the gap now standing at approximately $363,000.
This figure is nearly half (49.9%) of the median unit value in the capitals, according to Cotality’s latest Monthly Housing Chart Pack.
The premium has grown significantly from 20% five years ago, reflecting sustained demand for detached houses. The median value for a house in the combined capitals is now $1.091 million, while the median unit value is $728,000.
Recent data show that house values rose by 3.1% in the three months to October, outpacing the 2.3% increase for units. This has pushed the price gap to its highest level on record.
“Houses have always seen stronger uplift than units in the long term because of the associated land value,” said Kaytlin Ezzy (pictured right), economist at Cotality. “That price sensitivity appears to have blown out through the strong growth cycle over the past five years.”
The size of the house premium varies across cities, from 31.6% in Hobart to 77.8% in Sydney. Ezzy noted that affordability pressures could lead to more buyers considering units in Sydney in the near term, but expects houses to continue outperforming over time.
Affordability remains a key factor shaping the market. The strongest price growth has been recorded in the lower and middle value segments across most capitals. Cotality’s research indicates that the lowest 25% and middle 50% of market values are appreciating the fastest, a trend driven by buyers seeking more accessible price points.
Government initiatives, such as the expanded 5% deposit scheme with price caps near median values, may also be supporting growth in these segments.
“It is somewhat surprising to see such persistent outperformance of lower-value housing market segments given there were three rate cuts in 2025,” Ezzy said. “Usually the high-end of the property market is more responsive to rate cuts. However, we have only seen 75 basis points of rate cuts delivered this year, after a tightening cycle of 425 basis points, so perhaps this just wasn’t enough easing to push demand back into the high end of the market.”
The total value of Australia’s residential property market has now exceeded $12 trillion, reaching this milestone sooner than anticipated. The market has more than doubled in value over the past decade, with much of the growth occurring in the last five years.
The distribution of housing value has also shifted, with South Australia, Western Australia and Queensland increasing their share, while New South Wales and Victoria now account for a smaller proportion than five years ago.
“Victoria has seen the biggest drop off in housing market share in the past five years, from 29% five years ago, to less than a quarter of market share as of October this year,” said Ezzy, who pointed out that the change means emerging opportunities in different regions.
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