Australia’s great Aussie dream is being quietly rewritten and for the first time in years, it’s moving upwards instead of outwards.
New data reveals apartments have surged to their highest share of new home approvals in more than five years, marking a pivotal shift in how – and where – the nation is building homes as the housing crisis intensifies.
Fresh analysis from OurTop10.com.au shows apartments now account for 25.1 per cent of all new home approvals, a level not seen since 2020.
At the same time, detached houses – long the cornerstone of Australian home ownership – have slipped to 57.7 per cent, their lowest proportion in almost seven years and well down from pandemic highs of 67 per cent in 2021.
SA is leading the trend, with an annual growth of 170.62 per cent, followed by NSW (62.08 per cent), QLD (48.02 per cent), WA (36.15 per cent) and VIC (27.41 per cent). The national average is 50.94 per cent.
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Source: OurTop10.com.au
OurTop10.com.au chief executive Simon Ma said the figures exposed a deep structural problem in Australia’s housing supply.
“We’re building fewer homes per capita than we were ten years ago, and the gap is most severe in the affordable apartment sector that could house younger Australians and essential workers,” he said.
“Total home approvals have reached 193,299, the highest in three years, but we need sustained growth across all housing types to meet demand.”
Three-storey apartment buildings are leading the charge, with approvals surging a staggering 86 per cent year-on-year.
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Source: OurTop10.com.au
These mid-rise developments are rapidly re-emerging as the so-called “missing middle”, offering a compromise between sprawling suburban houses and towering high-rise blocks.
Despite the recent momentum, the data also exposes the depth of Australia’s housing shortfall.
Apartment approvals may have jumped 50 per cent over the past year, compared with just 1 per cent growth for houses, but apartment construction is still 44 per cent below levels seen a decade ago.
Australia’s population has surged 16.8 per cent in the past decade – an extra four million people – yet total home approvals remain 19 per cent below 2015 levels.
This, however, hasn’t stopped property prices from reaching new highs.
Latest PropTrack data shows the average Australian apartment now sells for $610,000, up $35,000 in the past year and $87,337 over three years.
Even with those rises, units remain far more accessible than houses, which now average $903,344 nationally.
Natalie and Costa Mina on the roof top terrace of their North Sydney Apartment Building. They have downsized to an apartment. Picture: John Appleyard
Sydney remains the nation’s most expensive apartment market at around $810,000, followed by Brisbane ($706,000), Adelaide ($615,000), Melbourne ($608,000), Canberra ($600,000), Perth ($595,000), Hobart ($550,000) and Darwin ($400,000).
According to developer Alceon’s Nick Hunter, affordability is only part of the story.
“For some buyers, affordability is absolutely the key driver, with apartments typically offering a lower entry price than detached housing in comparable locations,” he said.
“But just as importantly, buyers are getting stronger value for money. Modern apartments offer access to shared amenities that would be incredibly costly or impractical to replicate in a stand-alone home – pools, state-of-the-art gyms, infra-red saunas, cold plunges, private cinemas, golf simulators and co-working spaces.”
Low-maintenance living is another major drawcard.
“Many buyers want a lock-up-and-leave lifestyle that supports travel, flexibility and reduced ongoing upkeep,” Mr Hunter said.
Rumbalara Residences in Gosford, NSW
He said interest was also growing among young families who value walkability and convenience over backyard size.
“We’re seeing strong demand from buyers who prioritise proximity to childcare, parks, aquatic centres and essential services,” he said.
From a supply perspective, Mr Hunter said apartments were an essential – though not stand-alone – solution to the housing crisis.
Rumbalara Residences in Gosford, NSW
For retirees Sonya, 75, and her 85-year-old husband, apartment living has been transformative.
“My husband goes to the gym every day, I’m in the pool and spa all the time, and on Saturdays we do aqua aerobics,” Sonya said.
“The age mix here is beautiful – some people are still working, others are retired, but no one feels old. A few years ago, I felt about 100. Today I feel 45.”
As Australia grapples with surging prices, constrained land and relentless population growth, one thing is becoming increasingly clear: the future of housing is likely to be smaller, smarter – and stacked a little higher.
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