As the property market continues to shift, units have quietly become the most in-demand part of it. Apartment approvals climbed 13.2% over the last financial year, and buyer demand is following the same direction as buyers look for options they can actually afford.
House prices have softened in recent months, but softer is not the same as affordable. Prices are still well beyond what most households can service, and that is pushing many prospective buyers towards units, which are now outpacing houses on price growth.
Units Are Closing the Price Gap
PropTrack’s June 2026 Home Price Index shows unit prices grew 6.7% over the year, compared with 5.6% annual growth for houses. Units also held steady over the month while house prices slipped 0.4%. Cumulative growth has favoured units since January 2025 as well, at 9.9% against 9.6% for houses.
The reason is not complicated. The national median house price now sits at $1,001,000, against $735,000 for units. That is a gap of $266,000. According to PropTrack’s Housing Affordability report, the median household could afford loan repayments on just 15% of properties in 2025.
Buyer behaviour backs it up. REA Group senior economic analyst, Megan Lieu, notes that unit searches on realestate.com.au sat under 30% of total buy searches in late 2020, hovered between 37% and 39% through 2021 to 2024, and have lifted further again since late 2025. Meanwhile, new listings over the six months to June 2026 rose 6.3% for houses and 6.9% for units, so supply has grown at a similar pace across both. That points to the shift being driven by demand rather than by a flood of new stock.
Approvals Are Following the Demand
Australian Bureau of Statistics data shows total building approvals for June rose 7.2% to 18,328 in seasonally adjusted terms. Within that, private sector dwellings excluding houses rose 17.8%, while private sector houses rose 0.4%.
Zoom out to the full financial year and the picture is stronger. There were 48,778 new apartment dwellings approved in 2025-26, a 13.2% rise on the 43,079 approved in 2024-25. That puts the category at its highest level since 2017-18, an eight-year high. Total dwelling approvals across all types reached 205,249 for the year, up 9.2%.
This is good news for supply. The monthly state figures are worth reading carefully though, because they cover all dwelling types rather than apartments alone. Total approvals rose in Queensland (+33.4%), New South Wales (+13.2%) and Western Australia (+10.7%) in June, while they fell in Tasmania (-22.5%), Victoria (-13.9%) and South Australia (-11.5%).
There is also a lag to keep in mind. Housing Industry Association chief economist, Tim Reardon, has pointed out that the full impact of the Budget and this year’s rate rises is unlikely to show up in approvals data until later in the year. In other words, today’s approvals reflect decisions made months ago.
The Confidence Question
The market is walking a tightrope. Consumer confidence remains fragile, and PropTrack senior economist, Anne Flaherty, has suggested the Budget may have contributed to more cautious decision making among both owner occupiers and investors, alongside higher interest rates and cost of living pressure.
So the question becomes: if confidence is this soft, why are units holding up so well? Because affordability is the one thing buyers cannot negotiate on. When borrowing capacity tightens, the search does not stop. It moves down the price ladder. Units are what sits on the next rung.
Where Units Are Leading Houses
The trend is sharpest in specific pockets. These are the widest gaps between unit and house growth over the past year.
| SA3 Region | GCCSA | Median House Value | Annual House Change | Median Unit Value | Annual Unit Change | Unit Growth Advantage |
|---|---|---|---|---|---|---|
| Brisbane Inner | Greater Brisbane | $2,000,000 | -8.3% | $908,000 | 16.2% | 24.5ppt |
| Brisbane Inner – West | Greater Brisbane | $1,954,000 | 5.3% | $978,000 | 21.5% | 16.2ppt |
| Beaudesert | Greater Brisbane | $889,000 | 12.4% | $697,000 | 28.2% | 15.7ppt |
| Murray River – Swan Hill | Rest of Vic. | $429,000 | 11.6% | $378,000 | 25.2% | 13.6ppt |
| North Sydney – Mosman | Greater Sydney | $4,179,000 | -11.6% | $1,419,000 | 2.0% | 13.5ppt |
| Port Adelaide – West | Greater Adelaide | $905,000 | 11.5% | $749,000 | 24.1% | 12.6ppt |
| Boroondara | Greater Melbourne | $2,343,000 | -9.5% | $815,000 | 3.0% | 12.5ppt |
| Prospect – Walkerville | Greater Adelaide | $1,562,000 | 7.0% | $710,000 | 19.4% | 12.4ppt |
| Great Lakes | Rest of NSW | $838,000 | 1.8% | $654,000 | 14.1% | 12.3ppt |
| Canterbury | Greater Sydney | $1,742,000 | -3.3% | $683,000 | 8.8% | 12.1ppt |
| Mildura | Rest of Vic. | $551,000 | 10.5% | $393,000 | 22.5% | 12.0ppt |
| Canberra East | ACT | $1,938,000 | -9.2% | $631,000 | 0.5% | 9.7ppt |
Source: PropTrack, June 2026 Home Price Index, via REA Group analysis.
Brisbane Inner is the standout, with a 24.5 percentage point gap. House values there fell 8.3% over the year while units rose 16.2%. North Sydney – Mosman tells a similar story at the top end of the Sydney market, with houses down 11.6% and units up 2.0%.
The pattern shows up beyond the widest gaps too. Alice Springs recorded a 9.3ppt gap in favour of units, South Perth 8.7ppt, Cottesloe – Claremont 5.9ppt, Belmont – Victoria Park 5.2ppt, North Canberra 4.8ppt, Meander Valley – West Tamar 4.2ppt and Belconnen 1.9ppt. Worth noting that in smaller and more remote markets, sales volumes are thin enough that percentage movements can swing hard on relatively few transactions.
So What Does This Mean for You?
If a unit is looking like the more realistic option, the maths on purchase price is only half the picture. Units can be cheaper to buy and still be harder to finance, and that catches people out.
A few things worth understanding before you start looking:
Floor area matters to lenders. Many lenders apply a minimum internal floor area, often somewhere in the range of 40 to 50 square metres. Below that, your options narrow, and the lenders who will consider it may want a larger deposit.
Some postcodes carry restrictions. In areas with heavy apartment supply, certain lenders cap how much they will lend as a percentage of the property value. Two identical apartments in different postcodes can attract different terms.
Strata is part of your serviceability. Levies count towards your ongoing commitments, and a building with a history of special levies or defect issues can affect both lender appetite and your own budget.
Off-the-plan carries valuation risk. If a valuation at settlement comes in below your contract price, the shortfall usually needs to be covered with additional deposit.
None of this makes units a bad option. The data suggests plenty of Australians are finding them a smart one. It just means the lender you approach matters more than it does with a standard house purchase. With a panel of more than 40 lenders, our team can work out which ones treat your situation favourably before you commit to anything.
The Future of Units
Inflation figures remain above the Reserve Bank’s target band of two to three per cent, and Megan Lieu has noted that this raises the chance of a further rate rise in coming months. The RBA has held the cash rate at 4.35% at its most recent meeting, following three increases earlier this year, with its next decision due on 11 August.
If another rise comes, borrowing capacity tightens further and the affordability squeeze intensifies. Lieu suggests that would likely push an even larger share of buyers towards units, widening the gap further in regions where houses are already out of reach.
If rates hold, the picture does not change much either. The $266,000 gap between the median house and the median unit does not close because of one Reserve Bank decision. The shift towards units is structural, and it is worth understanding whichever way August goes.
If you are weighing up a unit, get in touch with our team at It’s Simple for a free call. No pressure, no jargon, just simple guidance on where you stand.
This article contains general information only and does not take into account your objectives, financial situation or needs. It is not financial or credit advice. Consider whether it is appropriate for your circumstances and seek advice from a qualified professional before making a decision. Lending criteria, terms and conditions apply and vary between lenders.