Policymakers want Australians to live in shoebox apartments to alleviate the structural undersupply of housing in our major cities and accommodate endless population growth.
Their mandate contradicts the views of Australians, who prefer to live in detached homes.
In May, the average price premium for a detached property in Australia’s major cities was 174%, according to PropTrack.
Detached houses have also seen significantly greater price appreciation since the pandemic began according to PropTrack.
Since December 2019, detached house prices in the combined capital cities have increased by 52.4%, more than double the 22.1% price growth experienced by units.
The rental market has seen a similar divergence, as shown below by Justin Fabo of Antipodean Macro:
As shown above, detached houses have seen far stronger rental increases than units.
The lack of buyer demand for units and apartments has been revealed in a new report from Cotality (formerly CoreLogic), which noted “a persistent underperformance in the unit sector over the decade to March”.
“Over the decade to March 2025, national house values rose 80.2%, more than twice the 37.7% gain in unit values”, noted Eliza Owen, head of research at Cotality.
“What we are seeing is a re-acceleration in the outperformance of houses, which must be frustrating for unit investors”.
“Units made up a disproportionately large share, accounting for 62.6% of all loss-making sales”.
Source: Cotality
The revealed preference of Australian home buyers shows that they want to live in detached houses, not units and apartments.
However, the federal government’s Big Australia mass immigration policy, which is behind the expansion and densification of our major cities, is forcing them to compromise on their preferred housing type.
In the not too distant future, only the wealthy will be able to afford to live in a detached house with a backyard in a major Australian city.
The Australian Dream will be replaced with high-rise shoebox living.
