In a significant shift that challenges traditional assumptions in the real estate market, new research shows apartments are outstripping houses in price growth across most of Australia’s capital city local government areas.
According to analysis from Nuestar and Hotspotting, 62.9 per cent of apartment markets recorded equal or greater median price growth compared to houses in the 12 months to May 2025.
The results signal a growing preference for apartments among both investors and owner-occupiers, particularly in locations offering lifestyle benefits and affordability.
“The common view is that the real money is in land, not apartments. However, that’s not our experience,” said Michael Wilkins, Nuestar Founder and Director of Property.
“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.”
Capital city markets driving the trend
Brisbane led the charge, with 76.3 per cent of its apartment markets outperforming houses over the past year. Perth followed closely behind, where 75 per cent of apartment markets recorded stronger price growth than houses—largely fuelled by affordability and rising demand.
Sydney also showed notable performance, with 71.4 per cent of its apartment markets outpacing 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 per cent recording higher apartment price growth than house price growth in the past 12 months,” Mr Wilkins said.
He noted strong results in apartment projects located near key infrastructure, employment hubs, and transport.
“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.”
Investor interest rises with performance metrics
Hotspotting Director Terry Ryder said the shift is more than just a localised trend, pointing to a national total of 154,928 apartment sales over the past year.
“The demand for apartments is expected to continue rising, driven by affordability, lifestyle preferences, and investment opportunities,” he 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 highlighted a number of standout examples, including a project in Como, Perth, where the median apartment price rose 27 per cent in 12 months, compared to 21 per cent for houses.
“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.
In Maylands, also in Perth, house prices rose 16 per cent over the year, while unit prices jumped 21 per cent. Apartment yields in the area are currently averaging 6.5 per cent, compared to 3.9 per cent for houses.
A shift in real estate fundamentals
With vacancy rates at historic lows and rental demand continuing to climb, Mr Ryder said the once commonly held view that houses always deliver superior capital growth is no longer a given.
“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.
As affordability pressures persist and buyer expectations evolve, the apartment market is set to remain a strong performer well into 2025 and beyond.
