This four-bedroom mansion at 69 Wolseley Road, Point Piper, was among the most viewed properties online this year.
Apartment values will increase at a faster rate than houses in Brisbane next year, fuelled by surging demand from home buyers priced out of freestanding homes, Domain predicts.
And in Sydney, Perth and Adelaide price gains in apartments are expected to match those for houses as more buyers move into the unit market as they grapple with constrained borrowing capacity and runaway house prices.
Domain forecasts Brisbane apartment values to increase by up to 9 per cent by the end of 2025, while house prices are expected to lift by up to 7 per cent.
Apartment and house prices are predicted to rise by 10 per cent in Perth, 9 per cent in Adelaide and 6 per cent in Sydney.
“The combination of escalating home values and the rising cost of credit has left many buyers unable to enter the market, especially in sought-after urban areas, so they may adapt by opting for townhouses and apartments or relocating to more affordable suburbs, which will drive prices higher for those properties and areas,” said Nicola Powell, Domain’s chief of research and economics.
“High interest rates and stretched affordability will continue to put downward pressure on prices next year, but the ongoing undersupply will help limit the impact.”
Surging demand for higher end apartments from wealthy downsizers will also help boost prices, said Nerida Conisbee, Ray White chief economist.
“Premium apartments are attracting a lot of cashed-up buyers who have the capacity to pay more, so this will lift the median unit value higher,” she said.
Tim Lawless, CoreLogic’s research director, also expected units to outperform houses, but only over the near term.
“I wouldn’t call this a long-term trend. I think ultimately we probably will see houses, once again, showing a stronger growth trajectory than units,” he said.
“I’d say it’s reasonable to expect unit prices to increase at a similar rate with houses next year given the affordability constraints in the market, but also the fact that we are starting to see the early signs of a supply response for houses, but not so across the multi-unit sector.
“But when apartment supply comes, they tend to be chunky, and they tend to overshoot demand, so this could dampen growth over the medium to long term.”
In the past 10 years, Sydney house prices increased by 89.7 per cent, while units rose by just 39.1 per cent, CoreLogic data shows. Melbourne’s house values gained 66.4 per cent, while units only lifted by 22.6 per cent. Similarly in Brisbane, house prices jumped by 97.1 per cent, while units climbed by 60 per cent.
For now, a shortage of new housing construction – hampered by high costs and labour shortages – will continue to limit supply and drive up prices, Dr Powell said.
Nationally, Domain is predicting house prices will increase between 4 per cent and 6 per cent next year, while unit values are set to rise between 3 per cent and 5 per cent.
However, in Canberra house prices are expected to gain 5 per cent, but units could fall by 4 per cent amid higher listings.
Brisbane and Adelaide house prices are expected to cross the $1 million median threshold by the end of 2025, with Perth not far behind.
“In 2025, we expect prices to keep rising, though at a slower pace than in 2024, due to affordability pressures and more buyer options, giving Australians greater leverage as the year unfolds,” Dr Powell said.
“The first half will be weaker as the dynamics of 2024 carry over, while the second half should see a rebound, with the RBA potentially moving to cut the cash rate, which would serve as a strong catalyst to drawing more buyers back to the market.”
This year, buyers snapped up a total of 324,104 houses nationwide, twice as many as units at 132,816, according to Domain.
This dilapidated property at 650 Yallock Road in Cockatoo, Victoria, pulled in the highest number of views this year.
A four-bedroom, two-bathroom and two-carpark house was the most in-demand property type in the country, followed by a two-bedroom, one-bathroom and one-carpark unit.
Properties in Stanmore in Sydney’s inner west attracted the highest views per listing nationally, followed by Paddington, Haberfield, McMahons Point and Lilyfield.
In Melbourne, homes listed for sale in Albert Park, Middle Park and Toorak gained the highest views, as well as those in Brisbane City, Red Hill and Brookfield.
A derelict property sitting on a 13-acre plot at 650 Woori Yallock Road, Cockatoo, 48 kilometres south-west of Melbourne was the most viewed property this year.
The property was listed for $900,000 and described as in a “very poor state of repair but has amazing views, a spacious courtyard, wide hallways, high ceilings and an abundance of storage space over three levels”.
In Sydney, a four-bedroom, 4. 5-bathroom, two-car garage mansion overlooking the harbour pulled in the highest views this year.
Perth dominated the list of suburbs where properties were selling the fastest this year, led by South Lake, Currambine, Cooloongup and Hocking. Homes sold within nine days, on average.
Paddington in Sydney’s eastern suburbs has the most expensive with homes selling at $28,713 per sq m on average, while homes in Curra in regional Queensland were the cheapest at just $56 per sq m.
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