A glaring price disparity between houses and units has taken shape in Sydney, with some suburbs now presenting differences substantial enough to purchase several homes elsewhere in the city. The latest data from realestate.com.au highlights this crucial divide, showcasing a notable separation between house and unit median prices across Sydney's 20 suburbs, representing both high-end and more affordable markets.
The difference in median values for houses compared to units has more than doubled since 2016, with house prices outpacing those of units considerably over the last decade. This trend has created increasingly challenging conditions for potential buyers.
Notable Suburbs with Growing Price Gaps
In premium coastal areas and eastern suburbs like Bellevue Hill, Vaucluse, and Tamarama, the gap between house and unit prices swelled from an average of $2.5 million in 2016 to over $6.25 million currently. Bellevue Hill, in particular, recorded the most extreme disparity, with the median difference ballooning from $3.34 million to an astounding $9.425 million over the 10-year span.
Middle-ring suburbs also demonstrate significant shifts. For instance, in Strathfield, Castle Hill, and Westmead, the average price gap increased from $760,775 to $1.7 million, while North Rocks saw its gap more than triple, escalating from $366,000 to $1.215 million by 2026.
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The median for units in Westmead stands at $600,000, with 4/7-9 Queens Road recently selling for $512,000.
These trends signal an undeniable shift in market dynamics, fueled largely by post-COVID changes. REA Group Senior Economic Analyst Megan Lieu explains that the pandemic period saw greater growth in house prices driven by land scarcity in many established premium suburbs. Meanwhile, in areas like Strathfield and Homebush, there’s been a notable influx of new apartment constructions compared to houses, contributing to the widening gap in house and unit prices.
While this may render houses increasingly unaffordable for many buyers, it also highlights units as a more accessible entry point into desirable locations. With housing affordability at a record low, units present a viable option for those eager to reside in high-demand areas.
How Buyers Adapt to Price Disparities
According to Belle Property Strathfield Principal Simon Furnari, the scarcity of new housing developments in suburbs like Strathfield underlines the price disparity. He notes the absence of fresh constructions, which exacerbates the gap between unit and house prices.
The trend has prompted some buyers, particularly downsizers, to seek innovative solutions. For example, David and Sue Upton purchased two units in The Atrium, Castle Hill, merging them to create adequate living space.
Mr. Upton shared that transitioning to units never crossed his mind initially, as ensuring sufficient space was vital for downsizers moving from large family homes. The trend of merging units highlights a practical approach for those aiming for a blend of space and affordability.
The median for houses in Westmead is currently $1,365,500; 35 Austral Avenue recently sold for $2.06m.
Ms. Lieu emphasizes that buyers have become increasingly cognizant of financial aspects when relocating, particularly as they consider the suburbs they're moving to. The demand for apartments is reshaping the new development strategy, prompting some developers to create larger, more flexible floorplans to attract buyers.
Puja Khanna, Associate Director of Design, Marketing, and Sales at Ellipse Property, noted that their response includes transforming existing apartments into larger residences, reflecting evolving market preferences around living space.
Key Price Gaps in Sydney’s Property Market
Top 10 Suburbs by Current Median Price Gap (House vs. Unit)
Suburb House Median Price Unit Median Price Median Price Gap
Bellevue Hill $11,000,000 $1,575,000 $9,425,000
Vaucluse $9,025,000 $1,537,500 $7,487,500
Tamarama $9,050,000 $2,085,000 $6,965,000
Dover Heights $8,500,000 $1,550,000 $6,950,000
Darling Point $9,300,000 $2,510,000 $6,790,000
Double Bay $8,225,000 $2,282,500 $5,942,500
Clovelly $6,710,000 $1,800,000 $4,910,000
Waverton $6,255,000 $1,441,000 $4,814,000
Cremorne Point $6,850,000 $2,150,000 $4,700,000
Rose Bay $6,450,000 $1,875,000 $4,575,000
Top Overall Suburbs in Western Sydney/Hills District by Median Price Gap
Suburb House Median Unit Median Median Price Gap
Strathfield $4,390,000 $762,500 $3,627,500
Homebush $3,025,000 $670,000 $2,355,000
Bella Vista $2,560,000 $945,000 $1,615,000
Carlingford $2,236,000 $720,000 $1,516,000
Castle Hill $2,550,000 $1,086,000 $1,464,000
Westmead $1,965,500 $600,000 $1,365,500
Dural $2,530,000 $1,235,000 $1,295,000
Oatlands $2,490,000 $1,200,000 $1,290,000
North Parramatta $1,970,000 $692,500 $1,277,500
North Rocks $1,880,000 $665,000 $1,215,000
For industry professionals, understanding these trends and their implications could provide insight into future market dynamics in Sydney.