Across the combined capital cities, 81.2% of suburbs have a median unit value below $500,000 with 27.6% of suburbs below $300,000. Within regional markets of the country, 96% of all suburbs have a median unit value below $500,000 with 68.8% of suburbs having a median unit value below $300,000.
Across each individual capital city market, a majority of suburbs have a median unit value below $500,000. Once again, Hobart has the greatest number of suburbs below this benchmark (100%) followed by: Adelaide (96.5%), Brisbane (94.5%) and Darwin (88.9%). All other capital cities show a majority of suburbs below $500,000. However, Sydney has the lowest proportion (62.1%), followed by Perth (80.5%), Canberra (84.9%) and Melbourne (85.1%).
The results indicate that the unit market provides a greater level of opportunity to enter into home ownership at a more affordable price point. Of course, units tend to not be as desirable as houses for many prospective buyers due to a number of factors, including the higher density of the population and the fact that units incur body corporate levies/regulations and, as a result, residents don’t necessarily have the same freedoms as with a detached house.
Although units may not be as desirable as a detached house, it is important to note that they are often more abundant in inner city suburbs which have high levels of local amenity. As a result of this, they also enable residents to live in those suburbs in which they desire to live but could simply not afford to own a detached home. A great example of this is a suburb like Sydney’s Mosman; the median house value is out of reach of most purchasers at $2,143,585. However, the median unit value is a much more attainable $593,655 (albeit still quite expensive).
Housing affordability is likely to continue to be an issue for many Australians looking to enter into home ownership despite recent falls to mortgage rates and home values. The alternatives for those looking to enter the market at affordable price points appear fairly clear: outer more affordable suburbs, select regional markets or higher density housing options. Many aspire to owning a home in a highly sought after suburb. However, the reality is that this is an unlikely prospect for most of the population.
This article first appeared on RP Data.
