Sydney and Melbourne unit values growing stronger than houses: CoreLogic

The unit sector across Sydney and Melbourne has shown stronger growth compared to detached housing, according to CoreLogic's Tim Lawless said.

“The March home value indices results also confirm that the unit sector is now consistently outperforming the detached housing market - a trend which has been evident since mid-2017," Lawless said.

"The stronger performance is subtle at the combined capitals level: capital city house values were down 1% over the March quarter while unit values were down a more moderate 0.7%.”

More significant differences between houses and units can be seen in Sydney and Melbourne where housing affordability pressures are more evident relative to other cities.

Sydney unit values are up 1.9% over the past 12 months, while house values are down 3.8%. Similarly in Melbourne, unit values are 6.6% higher over the past 12 months while house values are up just 4.9%.

Lawless said: “The stronger performance from the unit sector may suggest that buyer demand is becoming more concentrated in the medium to high density sector where entry prices are lower and commuting times are often more convenient when compared with the detached housing markets around the outer fringes of the city. 

“The surge in first home buyer activity since stamp duty concessions became available in July last year may also be supporting demand across the medium and high density sector where prices are often better aligned with first time buyer budgets.” 

Houses show a stronger performance to units outside of Sydney and Melbourne. Every other capital city has seen the detached housing sector outperform the unit market over the past 12 months.

In Brisbane, where concerns around unit oversupply have been evident, unit values were 1.4% lower over the past twelve months while house values moved up by 1.8%.