The gap between unit and house prices in Melbourne continues to widen and it’s making things difficult for some people looking to upgrade from their little unit to a bigger space.
Median house values in Australia are around 34 per cent higher than units according to CoreLogic figures, and it seems the more expensive or desirable the suburb the worse the discrepancy is.
“A trend in this data is that more expensive dwelling markets, particularly in the house segment, tend to correlate with the least amount of purchasing power from units,” a new CoreLogic report says.
“Many of these could be considered more ‘desirable’ housing markets, including those closer to CBDs.”
Not surprisingly, the CoreLogic figures show suburbs where there’s higher numbers of units and more stock had a wider gap between unit and house values.
Apartment owners in the current market are able to put less towards a home than they could five years ago when you consider the change in unit values as a portion of housing over time, making it frustrating for those looking to start a family.
On the positive side, CoreLogic says a lower proportion of housing stock does indicate a higher density of relatively cheap stock and allows for more socioeconomic diversity in inner city areas.
Unfortunately for unit prices, the cities where there’s high supply had meant price growth had been offset, making affordability worse for those looking to make the upgrade to a house.
“Looking forward, we could see unit purchases becoming more popular as demand is deflected away from houses simply due to affordability constraints becoming more pressing across the detached housing sector where values have risen substantially more than units,” CoreLogic’s report said.