PropTrack data reveals units in Australia’s most expensive suburbs sell for millions less than houses, offering affordable entry and higher rental yields for buyers.
Suburbs with multimillion-dollar median house prices aren’t necessarily out of reach for buyers with smaller budgets. PropTrack analysis shows that in some of Australia’s most expensive suburbs, units are selling for a fraction of house prices, opening the door for more first-home buyers and investors.
The data highlights more than 40 premium suburbs where median unit prices remain under $1 million, despite house prices stretching well beyond $2 million – and in some cases above $4 million.
In Toorak, Melbourne’s most expensive suburb, the median house price is $4.51 million, compared with just $798,000 for a unit – a difference of $3.7 million. In Sydney’s Strathfield, buyers can pay $755,000 for a unit compared with $4.25 million for a house.
At Surfers Paradise on the Gold Coast, houses command $4.1 million, while units sell for about $760,000 – less than one-fifth of the cost.
REA Group executive manager of economics Angus Moore (pictured) said the extreme gap is due to the type of homes available.
“In suburbs such as Toorak, detached houses are going to be, for a lack of a better word, estates, and so are very, very expensive,” Moore said. “Units are still on the more expensive end for Melbourne, so it's not so much that the units are cheap, but the houses are just really expensive.”
The affordability gap is reshaping demand in premium suburbs, with units increasingly attracting younger buyers.
“In Paddington in Sydney’s east, where most properties are terrace houses, rarer apartments have provided an entry point for budget-conscious buyers,” said McGrath Paddington real estate agent Georgia Cleary.
“Traditionally it was investors buying them, but in the last two or three years since interest rates dramatically moved up, investors have been selling out and first-home buyers and young people are buying.”
In Melbourne’s Hawthorn, where houses sell for more than $3 million, apartments are now the main entry point for new buyers.
“The gap between apartments and houses in Hawthorn is still extremely dramatic,” said Luke Saville of The Agency. “About 90% of apartments we’re selling are going to first-home buyers.”
For mortgage brokers with investor clients, units in blue-chip suburbs also provide stronger rental returns.
In Kensington in Sydney’s east, the indicative rental yield for houses is just 2% compared with 4.3% for units. Based on a $970,000 median price and $795 weekly rent, units offer far more accessible entry and better cash flow potential.
Moore said this difference is driven by stronger rental demand.
“Relative to owner-occupiers, there’s far more renters in apartments,” he said. “You don't see as much of a rental market for those ultra-premium homes.”
For brokers, the data underscores how shifting buyer behaviour is driving loan demand in premium suburbs. Brokers can support first-home buyers seeking entry into blue-chip markets, as well as investors looking for stronger yields in prestige postcodes.
To read the full PropTrack analysis, click here.
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