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Sydney suburbs with the largest gap between house and unit median prices

ASSA | 2021-02-16 09:49:13

The price gap between houses and apartments in Sydney has reached a record high, with freestanding homes in some pockets costing triple the median unit price.

In affluent suburbs like Bellevue Hill and Vaucluse upsizers face a price gap of more than $4 million between the median house and unit price, while those looking to upgrade to a house in Mosman, Rose Bay, Woollahra and Killara would need in excess of an additional $2 million in fund to say goodbye to apartment living.

But it’s not just upsizers in Sydney’s ritziest suburbs who are facing steep price jumps, with West Ryde in the city’s north west, Punchbowl in the Canterbury Bankstown region, and Penshurst in the south, among many suburbs where median house prices were more than double the cost of a median unit last year, according to Domain data.

Citywide the median house price – which hit a record $1.21 million in the December quarter – is now 66 per cent higher than the unit median of $729,840, according to the latest Domain House Price Report.

Source: Domain data. Note: Median prices are based on 2020 sales.
SuburbHouse MedianUnit MedianPrice gap
Bellevue Hill$5,800,000$1,400,000$4,400,000
Rose Bay$3,800,000$1,512,500$2,287,500
North Bondi$3,185,000$1,250,000$1,935,000

Domain senior research analyst Nicola Powell said it was the largest difference recorded since Domain began tracking prices in 1993. The average gap over the past decade has been 46 per cent, with the unit and housing markets rarely moving in opposite directions annually.

The growing gap speaks to increasing demand for houses off the back of the pandemic, with the rise of remote working encouraging more people to opt for a bigger home in the suburbs or regional areas, Dr Powell said.

Meanwhile unit demand had been weakened by the pull back in investors, international students and migrants, at the same time as increased unit supply was putting downward pressure on prices.

“The divergence of house and unit prices will increase the cost to upsize to a house,” Dr Powell said.

Girrahween 75-77 Kambala Road Bellevue Hill
In Bellevue Hill there is a $4.4 million difference between the median house and unit prices.

Admittedly few people buying a unit in an affluent neighbourhoods would ever expect to buy a house in the same suburb, with most upgraders looking to more affordable neighbourhoods.

“What it does show is the importance of having a diverse array of housing to offer those different price points,” Dr Powell added.  “Apartments offer better affordability and allow some to move into elite suburbs such as a Bellevue Hill, but it’s very unlikely those who purchase a unit could look to upsize there.”

While the gap was widest in prestige markets, it’s a trend that is impacting a wide range of regions and price points, Dr Powell said.

The auction of 4 Woodvale Avenue North Epping
First-home buyers were out in force at at auction in the Epping area late last year. Photo: Peter Rae

Houses cost at least twice the price of units across more than 40 per cent of NSW suburbs which had sufficient sales to record both a house and unit price median over the year. 

“It’s very much a two speed market,” said Catherine Murphy of The Agency North. “We’re seeing two very different tales, standing at an open for inspection for a house I may be seeing between 40 to 60 groups … [but at an open] in the same suburb for a newer style unit it’s much quieter.”

“You may be lucky to get one or two groups [for a new unit],” she said, but noted older-style apartments were seeing stronger demand.

Price gaps in areas such as Epping, North Ryde and Ryde — where local upsizers face price gaps of about $1 million, $890,000 and $842,000 — would make it tougher for upgraders, Ms Murphy added.

The bulk of house buyers were now coming from the inner west, she said, as a larger family home with a backyard had become more of a priority than proximity to the city.

The open home of 60 Young Street Annandale
House hunters line up for an open home in Annandale last weekend. Photo: Peter Rae

Inner west residents looking to upgrade within their suburb also face a sizeable price hurdle, with median house and unit prices separated by $1.83 million in Strathfield, $1,026,000 in Croydon, and by more than $850,000 in the likes of Summer Hill, Petersham, Camperdown, Ashfield, Five Dock and Dulwich Hill.

Peter Vassilis of Hudson McHugh said the price gap was becoming a growing concern for upgraders.

“Buyers right now are scared the gap is going to keep getting bigger and are trying to get in quicker … and that’s probably resulting in the [higher] buyer number coming through open homes,” he said.

While interest in units is softer than the “unbelievable” demand being seen for houses, there was strong demand for quality units in the area – largely driven by first-home buyers keen to get into the market, Mr Vassilis said.