Aussies locked out of ever being able to buy a house are now increasingly turning to apartments, new figures show.
New CoreLogic data released on Thursday revealed that near-record-high immigration pushed house prices in July to record highs in Sydney, Brisbane, Adelaide, and Perth.
In these same cities, apartment values last month grew at a faster pace than houses.
CoreLogic research director Tim Lawless said this was occurring because building activity failed to keep pace with population growth, leaving a severe housing shortage.
‘Beyond the number of homes available to purchase, the supply of newly built homes remains insufficient relative to population growth,’ he said.
Mr Lawless said poor affordability and higher interest rates meant younger buyers were turning to apartments, realising they were unable to buy a house on their own.
‘With stretched housing affordability, lower borrowing capacity and a lift in both investor and first home buyer activity, it’s not surprising to see the unit sector outperforming for a change,’ he said.
‘Units are now rising faster than houses across most of the capitals.’
Aussies locked out of ever being able to buy a house are now increasingly turning to apartments, new figures show (pictured are apartments at Waterloo in Sydney)
Sydney’s median apartment price last month climbed by 0.4 per cent to $852,766 as equivalent house prices edged up by 0.2 per cent to a new record high of $1.473million.
But in the provincial capital city markets, the difference was even more pronounced.
Brisbane’s mid-point unit price last month surged by 1.9 per cent to $638,909 – even more dramatic than the 1 per cent increase in house values to an all-time high of $966,825.
Over the year, apartment values in the Queensland capital have soared by 19.6 per cent, compared with 15.2 per cent for houses, as the state’s south-east corner continued to see an influx of interstate migration.
In Adelaide, apartments values in July soared by 2.7 per cent to $546,429 as house prices rose by 1.6 per cent to a new record high of $830,609.
The annual increase for units of 18.5 per cent was even firmer than the 15.1 per cent increase in house values.
In Perth, unit values last rose by 2.1 per cent to $540,546 as house values went up by 2 per cent to a record-high of $808,038.
Strong interstate migration to more affordable capital cities is occurring as building approvals fail to keep pace with population growth.
In the year to March, just 158,933 new homes started construction as 487,940 migrants, on a net basis, moved to Australia with this figure covering skilled migrants and international students.
With Australian households having 2.5 people on average, that left 90,607 people struggling to find somewhere to live, based on Australian Bureau of Statistics data.
While house prices at record highs in Sydney, Brisbane, Adelaide and Perth, in Melbourne they peaked in March 2022 – two months before the Reserve Bank embarked on the first of 13 interest rate rises.
A 12-year high cash rate of 4.35 per cent also means the banks can only lend borrowers 5.2 times their salary before tax, meaning property values are falling in cities where interstate migration is weak.
Brisbane’s mid-point unit price last month surged by 1.9 per cent to $638,909 – even more dramatic than the 1 per cent increase in house values
House prices in the Victorian capital last month fell by 0.5 per cent to $944,138, making it even less expensive than Brisbane, as unit values dipped by 0.2 per cent to $610,300.
Hobart prices also peaked in March 2022, with house values last month falling by 0.8 per cent to $686,660.
Canberra property prices peaked in May 2022, with unit values in July dipping by 0.6 per cent to $583,073.
Darwin is Australia’s worst performing market, with home prices still below the peak of May 2014 during a previous liquefied natural gas boom.
Unit values in the Northern Territory capital last month fell by 0.3 per cent to $367,487.
