The latest analysis of Australia’s capital city local government areas by Nuestar and Hotspotting reveals a significant shift in the real estate market, with apartments outperforming houses in price growth across multiple regions.
The research, covering the 12 months to May 2025, found that 62.9% of apartment markets recorded higher or equal median price growth compared to houses.
Nuestar Founder & Director of Property Michael Wilkins said the changing landscape of property markets is increasingly challenging the old paradigms of real estate.
“The common view is that the real money is in land, not apartments. However, that’s not our experience,” Mr Wilkins said.
“With lifestyle benefits, lower costs, and outstanding locations, apartments are fast becoming the preferred choice for both homeowners and investors.
“Prices per square metre are continuing to rise, and developers are recognising that quality design, premium inclusions, and integrated amenity are increasingly the key to market appeal.”
Brisbane leads the charge, according to the research, with 76.3% of its apartment markets showing stronger growth than houses over the year, while Perth follows closely behind, with 75% of its apartment markets outperforming houses, driven by affordability and rising demand.
Sydney’s apartment market is also thriving, with 71.4% of its apartment markets surpassing house price growth.
“While the Perth apartment market is smaller, rising house prices mean even more buyers are turning to its more affordable apartment market, with 75% recording higher apartment price growth than house price growth in the past 12 months,” Mr Wilkins said.
“We continue to deliver strong results in apartment projects in locations grounded in solid fundamentals: population growth, employment hubs, infrastructure, and transport.
“We’ve also seen excellent performance in areas undergoing demographic change and regeneration.”
Hotspotting Director Terry Ryder said the trend extends beyond individual cities, with national apartment sales reaching 154,928 in the past year.
“The demand for apartments is expected to continue rising, driven by affordability, lifestyle preferences, and investment opportunities,” Mr Ryder said.
“Brisbane’s inner-city market, in particular, is benefiting from major infrastructure projects and the upcoming 2032 Olympics, which is further fuelling growth.”
Mr Wilkins said apartments are continuing to offer significant investment potential for both homeowners and investors.
“A Perth project in Como is typical of what works in today’s market. Its key fundamentals are river frontage, views, public transport and easy access to the CBD, surrounded by older homes with new architectural rebuilds happening,” he said.
“The median apartment price in Como increased 27% in the past 12 months, compared to 21% for houses, and the yields are significantly higher. In another inner Perth suburb, Maylands, houses have increased 16% but units are up 21% with 6.5% yields, compared to 3.9% for houses.”
With vacancy rates at historic lows and rental demand surging, Mr Ryder said apartment price growth will continue to outpace houses in key locations throughout 2025.
“The once dominant paradigm of real estate – that houses on land showed superior capital growth to apartments – is simply no longer the case,” he said.
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