Ray White Group Chief Economist, Nerida Conisbee, said that Perth, Adelaide and Brisbane are all seeing stronger price growth in units than houses.
“Perth units are surging ahead with 13.1 per cent annual growth compared to 11.6 per cent for houses, Adelaide apartments deliver 9.7 per cent against 8.9 per cent for houses, and Brisbane units edge past houses with 9.5 per cent growth,” Ms Conisbee said.
“This outperformance masks a deeper crisis in apartment supply and affordability.”
Ms Conisbee said that the root cause is a reduction in apartment construction, particularly in affordable and mid-market segments that traditionally provided accessible housing options.
“The apartment supply crisis is starkly illustrated by construction completion data, which shows apartment deliveries have plummeted by over 40 per cent from their peak,” she said.
“Australia completed approximately 75,000 apartments in 2024, down from a peak of over 125,000 units in 2016.”
This decline has created a scarcity-driven market where limited supply is pushing prices higher across all segments.
“Annual apartment completions have collapsed from over 97,000 in 2018 to just 58,913 in 2023, though 2024 showed a modest recovery to 64,869 units – still 33 per cent below peak levels,” Ms Conisbee said.
The analysis reveals that when new apartment projects do proceed, they’re predominantly targeting premium buyers, as developers struggle with elevated construction costs and record-high land prices.
“Construction costs that remain 30-40 per cent above pre-pandemic levels, combined with development site prices at record highs, mean that new apartment supply is increasingly concentrated in premium segments where higher sale prices can justify elevated development costs,” she said.
Perth is a good example of this trend, according to Ms Conisbee, with units now offering what appears to be a significant discount compared to houses.
“With units now costing $618,000 compared to $938,000 for houses, apartments appear to offer a 66 per cent discount,” she said.
“Apartment prices are however growing at a faster rate.
“Both segments are experiencing acute supply shortages, with apartment construction particularly constrained by elevated development costs and land prices that have risen over 75 per cent since 2020.”
Adelaide has the longest-running impact of this supply shortage, with units outperforming houses across 12 consecutive months since July 2024.
Brisbane’s more recent unit outperformance began in early 2025.
Monthly growth numbers show Perth units advancing 1.4 per cent and Adelaide and Brisbane units both growing 1.0 per cent.
“Even regional areas are experiencing this phenomenon, with Regional WA and Regional SA recording 1.8 per cent monthly unit growth as supply shortages spread beyond capital cities,” Ms Conisbee said.
She said that without meaningful increases in affordable apartment construction, the current scarcity-driven growth may continue, making apartments increasingly unaffordable for the very buyers they once served.
“The result is that units outperform houses not because apartments are abundant and affordable, but because they’re increasingly rare and expensive,” Ms Conisbee said.
