Apartment owners upgrading to a detached home are being forced to dig deeper into their pockets as the premium for houses over units blows out to a new record high nationwide because of strong demand and low supply, analysis by CoreLogic shows.
The price gap between Sydney houses and apartments has now widened to 59 per cent – up from 54.2 per cent in July. This comes after house prices jumped by 28.9 per cent in the 12 months to September – more than double the 11.6 per cent gain in unit values.
At 59 per cent or $486,781, the gap between what it costs to buy a median house compared to a median apartment has never been wider in Sydney. Other capital cities are also seeing record gaps.
The growing gap has been a challenge for apartment owners such as Monique Channells-Baker and Scott Baker who have been looking to up size to a house in the past five months.
“The market has shifted significantly since we started looking seriously, prices have risen rapidly, and we’ve been priced out every time we find a house we like,” Ms Channells-Baker said.
“We’ve been pushed further out from where we wanted to buy originally because other buyers were willing to pay more than we’re prepared to.”
The couple engaged buyer’s agent Amanda Gould at HighSpec Properties to help them find their home, but even with professional help they found it tough to navigate the fast-moving house market.
“The biggest challenge we’re facing is the adjustment we’ve got to make in terms of how much we’re willing to pay,” Ms Channells-Baker said.
“It’s really hard to wrap our heads around how a house priced at $2.3 million will sell at $3.3 million at auction. Every time we find a house that we thought we can afford, we get knocked down.
“So it’s that massive shift in what we thought we could get for our money versus what we could actually get.”
It is a similar picture for upsizers elsewhere in the country, with houses now fetching a 34.4 per cent premium over units nationally – a 3.9 percentage point rise in three months.
In Melbourne, houses are now worth 55.3 per cent more compared to apartments – up by 2.9 percentage points since July. In Brisbane, the price gap between houses and units has widened by 6.7 percentage points to 64.9 per cent.