smh.com.au
Apartment Price Growth Lags Behind Houses in Major Australian Cities
In the decade to March 2025, Sydney unit prices rose 28.4% to $823,000, significantly less than house price growth of 81.9% to over $1,691,000; Melbourne saw similar trends (units up 24.2%, houses up 59.7%), attributed to increased apartment supply and impacting first-home buyers and upgraders.
- What accounts for the substantial difference in price appreciation between apartments and houses in major Australian cities over the past decade?
- Over the past decade, Sydney's median unit price increased by 28.4% to $823,000, while house prices surged 81.9% to over $1,691,000. Melbourne saw similar trends, with unit prices rising 24.2% to $550,000 and house prices climbing 59.7% to nearly $1,036,000. This disparity highlights the impact of increased apartment supply on price growth.
- How has the increased supply of apartments affected different segments of the housing market, including first-home buyers and those seeking to upgrade?
- The significant difference in price growth between apartments and houses in major Australian cities stems from a larger volume of new apartment construction. This increased supply, particularly between 2015 and 2020, has dampened price growth for units, creating more affordable options for first-home buyers. However, this also presents challenges for those seeking to upgrade to larger properties.
- What are the long-term implications of this price disparity and how might government policies address the challenges it poses for housing affordability and mobility?
- The ongoing imbalance in supply between apartments and houses suggests a persistent affordability challenge for those seeking to upgrade from apartments to houses. While increased apartment construction offers more accessible entry points to the market for first-home buyers, the limited supply of larger apartments may hinder upward mobility. Government initiatives promoting unit construction and addressing building standards issues are key to mitigating this.
Cognitive Concepts
Framing Bias
The article frames the slower price growth of apartments as a positive for first-home buyers, highlighting the increased affordability. While this is a valid point, the framing emphasizes the challenges for those looking to upgrade, potentially leading readers to view apartment ownership as a less desirable long-term option compared to house ownership. The headline, if there was one (not provided), could significantly affect this framing. The repeated emphasis on the challenges for second-home buyers reinforces a pro-first-home-buyer bias.
Language Bias
The language used is largely neutral and objective. However, phrases like "some respite for first home hopefuls" and "a challenge to prospective second home buyers hoping to upgrade" subtly frame the issue in terms of the hopes and challenges faced by particular groups, potentially influencing the reader's emotional response. While not overtly biased, these phrases could be replaced with more neutral alternatives, like 'price growth in apartments has provided increased affordability for first home buyers' and 'upgrading to larger homes poses affordability challenges for some buyers'.
Bias by Omission
The article focuses heavily on the price disparity between apartments and houses, and the challenges this poses for first-home buyers and those looking to upgrade. However, it omits discussion of other factors that might influence housing affordability, such as interest rates, government policies beyond the 5% deposit scheme, and the impact of inflation on construction costs. The perspectives of renters are also largely absent, despite the fact that many of these apartments are designed for renters. While acknowledging space constraints is important, the omission of these perspectives limits the overall understanding of housing affordability.
False Dichotomy
The article presents a somewhat false dichotomy between apartments and houses as housing options. While acknowledging the challenges faced by those looking to upgrade from apartments, it doesn't fully explore the possibility of other housing types or strategies to increase overall housing options, such as townhouses, duplexes or greater focus on infill development. This simplification may limit the reader's understanding of a broader range of solutions to the affordability crisis.
Sustainable Development Goals
The article highlights that apartment prices have risen at a slower rate than house prices, making homeownership more accessible to first-home buyers, thus contributing to reduced inequality in housing affordability. Government initiatives such as schemes to allow first home buyers to purchase with a 5% deposit further support this positive impact.