Which Melbourne suburbs have the largest price gap between houses and units?

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Which Melbourne suburbs have the largest price gap between houses and units?

After suffering a challenging 2020, including a number of lockdowns, the Melbourne property market is on fire.

And it is well documented that the price gap between Melbourne houses and units has widened over the last couple of years.

While family-friendly apartments in smaller low-rise blocks are still popular, the closure of our international borders and restricted traveling has meant there is little demand for apartments in the many high-rise apartment towers that litter Melbourne's skyline.

The latest Domain House Price Report shows that Melbourne’s median house price – which hit a record high of $936,073 in the December quarter – is now 64 per cent higher than the unit median of $569,677, which also reached a new high in December.

The report shows that, not surprisingly, the price gap between houses and units is far greater in some of Melbourne’s most affluent suburbs.

Top 10 suburbs with the biggest price gaps between house and units

Suburb	Median house price	Median unit price	Gap between houses and units
Toorak	$4,181,250	$950,000	$3,231,250
Brighton	$2,872,500	$970,000	$1,902,500
Malvern	$2,364,000	$660,000	$1,704,000
Balwyn	$2,180,000	$630,000	$1,550,000
Hawthorn	$2,102,000	$603,500	$1,498,500
Kew	$2,180,000	$734,900	$1,445,100
Hawthorn East	$1,995,000	$630,000	$1,365,000
Glen Iris	$2,050,000	$687,250	$1,362,750
Elsternwick	$1,993,075	$661,000	$1,332,075
Armadale	$1,935,000	$618,000	$1,317,000

Source: Domain House Price Report, December quarter, 2020. Source: Domain

Domain senior research analyst Nicola Powell says she expects the gap between houses and units to continue to grow this year on the back of the pandemic, which has led to an increase in remote working and seen many inner-city dwellers seek out bigger homes in the suburbs or in regional areas.

Prior to the pandemic, unit prices were growing at a faster rate than houses, with 12.2 per cent growth over 2019, compared to 8.7 per cent for houses.

However, last year Melbourne houses outperformed units, with house prices growing by 3.9 per cent in 2020, compared to apartments, which grew by 2.5 per cent.

In the last three months of last year, house prices increased by 5.3 per cent, compared to 4.4 per cent for units.

Of course, broad generalisations like this are not really that useful for property investors.

There is a wide variety of apartments from the poor quality investment stock packed into the many new medium and high-density buildings to family-friendly apartments with courtyards or large useable balconies in desirable lifestyle neighbourhoods.

Moving forward, it is likely that house prices will grow more than apartment prices over the next couple of years, however, well-located townhouses which have their own significant land component will make excellent investment properties and are currently in strong demand by many first home buyers who are being priced out of the housing market.

Now is the time to take advantage of the opportunities the current property markets are offering.

Sure the markets are moving on, but not all properties are going to increase in value. Now, more than ever, correct property selection will be critical.

You can trust the team at Metropole to provide you with direction, guidance, and results.

Whether you’re a beginner or an experienced investor, at times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that's exactly what you get from the multi award-winning team at Metropole.

We help our clients grow, protect and pass on their wealth through a range of services including:

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About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.