Price gap fuels unit demand

Price gap fuels unit demand

Posted on Monday, February 02 2015 at 10:59 AM

Demand for attached housing is partly driven by the widening price gap between capital city houses and units prices according to one analyst.

RP Data have released research showing the value difference between attached
and detached accommodation continues to expand.

Lawless, research director at CoreLogic RP Data, says price disparity has never
been greater in Sydney, Melbourne and Canberra, while Brisbane and Perth are
also near record highs.

certainly goes some way to explaining why we’re seeing record high dwelling
commencements for units.”

Lawless says there
are a large number of units being constructed in Sydney, Melbourne and Brisbane
in particular.

“Growing demand for
unit stock, both from investors and owner-occupiers, and the sheer
affordability difference between house and unit prices at least partly explains
this growing level of demand.”

The price
differentials according to CoreLogic RP Data are:

Sydney $243,000                             Canberra $172,000

Melbourne $170,000                      Adelaide $87,800

Brisbane $102,000                         Hobart $80,000

Perth $110,000                                Darwin $32,000

Lawless warns that
given the lag between approval and construction, there’s potential to
oversupply the market.

challenge will be to ensure that overdevelopment doesn’t occur – demand has
increased for higher density housing stock but the level of apartment
development currently taking place is unprecedented.

“It’s important to remember that units have typically been
the domain of investors rather than owner-occupiers.”



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