Unit popularity down: RP Data

Units are proving less popular that detached houses despite cheaper prices according to RP Data’s latest report.

The proportion of units sold has dropped at a national and capital city level, according to RP Data’s property pulse. As of June 2012 units represent 28.1% of all sales across the country, compared to 29.5% in June 2007.

Canberra had the biggest drop in proportion of unit sales from 2007 to 2012, dropping from 49% to 42.8%.

RP Data’s Cameron Kusher puts the decrease in unit interest down to the availability of first home buyer grants and stamp duty concessions coupled with recent valls in home values which has improved affordability.

He says units tend not to decline in value as much as houses which gives buyers the opportunity to buy houses.

Across the nation, median unit prices are now just $25,000 cheaper than house prices. In capital cities, units are $53,000 cheaper.

Kusher also says one of the main reasons unit interest appears down is because of the rising number of off-the-plan sales which don’t appear in their statistics until they are settled.

On a capital city level, units are $48,000 cheaper than houses in Melbourne, while in Sydney and Canberra they are $110,000 cheaper.

Kusher says given the difference, it comes as no surprise that Sydney and Canberra have recorded the greatest proportion of unit sales over the past year at 42.5% and 42.8% respectively.

In Perth, where units are $71,000 cheaper than houses, units still only represent 18.4% of sales – the lowest proportion of any capital city.

Despite the drops in interest Kusher expects the popularity of units to increase.

“Over the coming years, we would expect that units are likely to grow in popularity. Although unit sales pale in comparison to house sales across the country, as developable land becomes scarce and more expensive
to develop, property developers are likely to focus on higher density housing,” Kusher says.

“The community at large is also likely to demand more units, particularly in suburbs close to city centres or along transport corridors. This will likely be driven by lifestyle and affordability factors as well as
town planning strategies.

“Demographic factors are also likely to contribute to greater demand for units with baby boomers looking to downsize from their large family homes into something smaller and more easily maintainable. Also, the
ongoing demographic shift to single person households and smaller families is likely to result in further growth in unit demand.”