Price gap widens between houses and units

The-price-gap-between-Sydney-units-and-houses-is-growing_157_6003021_0_14101414_300Residential houses in Sydney have long been touted as the hot ticket when selling real estate in New South Wales, but the latest figures from CoreLogic RP Data show that when you are looking to buy, units are on the up and coming track.

Derived from CoreLogic RP Data Home Value Index, which presented median selling price data for last three months to December 2014, the figures reveal that the gap between house and units prices across Australia’s capital cities has never been larger. Once again Sydney has proven itself a heavyweight of the property market, with the cost of housing relative to other cities widening substantially.

It will come as promising news to those looking to buy property in the New South Wales capital that the enormous gap between house and unit prices is primarily a result of burgeoning demand from investors and owner occupiers. Desire for unit stock is driving record levels of construction and pushing down prices, which is creating the ideal conditions for snapping up a good deal.

However, the report points out that overdevelopment can become a real issue if left unchecked. At the moment high density housing is in hot demand, but apartment development is also experiencing exceptional growth. With investors scrambling over one another to invest, there is a risk that owner occupier demand will trail off – and this could undermine Sydney’s housing market.

Sydney has the largest variation between houses and units, recording an astounding differential of $243,000. This figure is even more impressive in light of data from the Australian market as a whole, where the average price of a home was almost 20 per cent – or $100,000 in dollar terms – more than the median cost for a unit.

Three other cities recorded value differences in excess of $100,000, with Melbourne sitting markedly behind Sydney at $170,000, Perth with a disparity of $110,000 and Canberra at $172,000. Adelaide, Hobart and Darwin trail behind, with $87,800, $80,000 and $32,000 respectively.

While the higher supply of apartments has the potential to undermine capital gains for investors, comparatively low unit prices presents opportunities for buyers. If you are pursuing an apartment in the harbour city, your real estate agent can help secure the perfect apartment to suit your needs.

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