House vs unit: areas with smallest and biggest price gaps
House and unit prices have begun to converge in many Sydney areas, with new data showing property seekers can get houses for only marginally more than a unit in some locations.
The exclusive Ray White research indicated the average difference between units and houses in certain western suburbs was as little as 20 per cent – well below trend for Sydney, where houses are typically about 80 per cent pricier than units.
The narrowing of house and unit prices in some areas has followed a long run of unit price increases since interest rates began to rise in early 2022.
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Higher rates forced more buyers to target cheaper units and the resulting increase in competition pushed up apartment prices – especially in suburbs west of Parramatta.
There has also been large scale unit development, which has meant units are often a lot newer than the local house stock and this has attracted a premium.
Western Sydney suburb Lethbridge Park had one of the tightest gaps between unit and house prices. A unit or townhouse in the area cost an average $647,000, while houses cost $838,000 – just 22 per cent, or $190,000 more, according to Ray White.
The analysis revealed that by boosting your budget between 20-25 per cent, buyers in St Clair, Gorokan, Kanwal, Charmhaven and Cambridge Park could buy houses instead of units.
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On the other hand, apartments offered an entry into some of Sydney's most sought-after and expensive markets, where the analysis revealed the difference between the two dwelling types was an eye-watering $3m.
Ray White chief economist Nerida Conisbee said the areas with a smaller price gap likely had older houses competing with newer apartments and townhouses.
'But if you're looking long term and might do a renovation project or a knockdown rebuild, there's opportunity there,' she said.
That climate contrasted with much of the north shore, including suburbs Greenwich and Riverview, where money-conscious buyers were far better off buying a unit.
Apartments in these areas cost about $1.07m compared to the median price of a house at $4.06m, a saving of almost $3m.
It was a similar story for nearby Mosman, along with eastern suburbs Bellevue Hill, Dover Heights and Rose Bay.
Ms Conisbee said Aussies in most city areas would need to embrace apartment living for affordability reasons but those who could afford houses would benefit from more capital growth.
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'When we look overall at a city, houses do generally outperform apartments,' she said.
Buyers advocate Cate Bakos said it came down to the buyer's needs.
'If their dominant need is location I'll be talking to them about a unit if they're priced out of a suburb. If their dominant need is the dwelling size and the long tenure of the home, we look at houses,' Ms Bakos said.
Eddie Dilleen, one of the country's most successful investors, found purchasing a unit was more cost affective in building a large property portfolio.
'About 70 per cent of my portfolio is affordable units, townhouses and villas and I've had better results with these kids of properties,' he said.
Rose and Dave Ung decided to flip the narrative and sold their suburban family home to move into a three-bedroom apartment in Rhodes with their two kids and dog.
'(We're) well connected with public transport, we have immediate access to parklands,' Ms Ung said.
'There is such a big (price) difference between the houses, a couple million dollar difference … we have a three bed apartment and study, so it's quite generous and works for our family, there wasn't a benefit in forking out a couple extra million.
'What I like about apartment life is the community aspect, shops, convenience of things, I've connected with the community and the local cafe owner … in our house we didn't even have a favourite cafe.'
Billbergia's development director planning and design Saul Moran buyers aren't necessarily prioritising houses and land but 'liveability, the convenience of living close to amenity and transport'.
Rhodes residents in Bilbergia's Oasis and Peake buildings could access a pool, spa, kids splash zone, table tennis, work from home break outpaces and an off-leash dog park that added another element of convenience for the residents, he added.
'It's the evolving nature of the great Australian dream that's more viable in the modern economic world,' he said.
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