‘Gone gangbusters’: Where units have made the most money

Apartment prices have jumped almost half a million dollars in just three years in some suburbs, even though interest rates surged in that time.

Buyers of units in many suburbs of south east Queensland in particular are sitting on huge equity gains after apartment values skyrocketed by hundreds of thousands of dollars.

PropTrack price data shows that the suburbs where prices rose the most in the past three years were mostly located in Brisbane, the Gold Coast and the Sunshine Coast, which have been among the top-performing regions for property price growth recently.

In a handful of highly sought-after suburbs, median unit values rose by more than $400,000.

A typical Noosa Heads unit is now worth just under $1.8 million, which is almost $450,000 more than three years ago.

Big gains were also recorded in the Gold Coast suburbs of Bilinga (up $425,000), Main Beach (up $400,000) and Broadbeach Waters (up $352,000).

Ormiston in Brisbane’s east recorded a $315,000 increase in unit prices in three years, while prices in Manly West rose by just under $300,000.

Suburbs where unit prices rose the most in the past three years - capitals

REA Group senior economist Anne Flaherty said strong unit price growth in south east Queensland suburbs was largely a result of surging population growth amid a shortfall in housing supply.

“Queensland has the strongest interstate migration of any market, and a lot of that is to do with downsizers and people retiring into the sunshine state,” she said.

A typical unit in Noosa Heads costs almost $500,000 more than just three years ago. A three-bedroom apartment in this complex recently sold for $5 million. Picture: realestate.com.au/sold

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“But it’s not just retirees moving up north – we also see younger demographics, often from New South Wales, where housing is prohibitively expensive.”

“Even though you’ve seen very strong price rises in recent years, compared to a market like Sydney it’s still more affordable.”

Suburbs where unit prices rose the most in the past three years - regions

Bilinga, situated at the southern end of the Gold Coast, has been popular among first-home buyers, interstate downsizers and investors recently, but was less well-known compared with other suburbs further north, according to local real estate agent David Stringer. 

The Gold Coast suburb of Bilinga has been flying under the radar, but strong unit price growth has put it on the map. Picture: realestate.com.au/sold

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“It’s such a nice, peaceful area, but you’re close enough to Kirra, Coolangatta and Tugun,” he said. “It’s probably underdeveloped as well, as there’s caps on development.”

“It’s still a little bit unknown so it’s been flying under the radar. There’s so much demand for people to live by the beach, so with limited supply it’s going to push prices up.”

‘Massive oversupply’ completely reversed

A lack of new apartments being built in south east Queensland had also put pressure on unit prices, Ms Flaherty said.

“Queensland is one of the states that’s been hit hardest in terms of not being able to build enough homes relative to the speed at which the population is growing,” she said.

For many long-term unit owners and investors, price rises in recent years have come after an extended period of price stagnation due to an influx of new apartments hitting the market a decade ago.

Most of the top-growth suburbs for unit prices in the past three years were located in south east Queensland, and especially the Gold Coast. Picture: Getty.

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“If we look back around 10 years ago, there was a massive oversupply of homes being built,” Ms Flaherty said.

“We were seeing a lot of apartment developments in south east Queensland and that development was exceeding population growth, so we saw apartment prices stagnate for a really long time and even decrease in a lot of suburbs.”

“Now we're in the complete reverse situation where the total number of homes in south east Queensland is insufficient to meet demand, meaning there’s increased competition for homes that come up for sale and that’s pushing up prices.”

South east Queensland once faced an oversupply of apartments, but nowadays demand massively outstrips the amount of housing available. Picture: Getty

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That pressure on prices has also coaxed more investors to Queensland, Ms Flaherty said.

“Investors are being drawn to the fact that there are still strong prospects for capital growth,” she said.

Prices soar after extended stagnation

While Queensland dominated the lists of both capital city and regional suburbs where prices increased the most, the top growth suburb for unit prices was found on the other side of the country.

Unit prices in the beachside Perth suburb of Cottesloe were $490,000 higher than three years ago, the data shows.

A typical Cottesloe apartment is now worth $1.23 million, up from $740,000 three years ago.

“It’s a relatively small suburb with really big demand,” said local real estate agent and Acton Belle Property Cottesloe - Nedlands director Bev Heymans.

A typical unit in Cottesloe costs half a million more than three years ago. Picture: realestate.com.au/sold

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While the recent meteoric rise in values has been a boon for recent buyers in the coastal enclave, the surge came after prices flatlined for most of the past decade.

In 2015, Cottesloe’s median unit price was $725,000, meaning typical values rose just $15,000 in the seven years to 2022, when the most recent boom began.

“It was pre-COVID that we started to see a move, and then it's gone gangbusters, fuelled by very limited stock,” Ms Heymans said.

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That trajectory is emblematic of Perth’s property market, with both house and unit prices surging in the past few years off the back of population growth, supply shortages, increased investor demand and relative affordability compared to the other capitals.

Prior to that, Perth had underperformed compared with the other capitals since the end of the previous mining investment boom.

Units outpace houses in rapidly growing capitals

Price growth for units is now faster than that of houses in both Perth and Brisbane, the latest PropTrack Home Price Index shows, with many buyers now opting for the traditionally more affordable property type as house prices rise further out of reach.

But while price growth has been strongest in the more affordable capitals recently, several of the top growth suburbs for apartments were located in Sydney, the priciest city in Australia.

Unit prices rose $420,000 in Little Bay in Sydney’s east, while values climbed $325,000 higher in both Cherrybrook and Thornleigh in the city’s northwest – suburbs where the unit market is dominated by townhouses with house-like proportions.

Increased demand for townhouses in Thornleigh, which tend to be more affordable than freestanding houses, has supported price growth. Picture: realestate.com.au/sold

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“Thornleigh has always been heavily undervalued,” said local real estate agent Josh Saliba. 

“As freestanding house prices have gone up, we’ve started to see those become a lot more unaffordable, while the townhouse market is relatively more affordable.”

Ms Flaherty said falling interest rates would support further price growth, and while lower borrowing costs would encourage development, it would take some time for enough new apartment stock to come online to have an effect on pricing.

“The main effect lower interest rates are going to have is to put upward pressure on prices,” she said.

“Lower interest rates will help to spur more development activity because it feeds into one of the main costs associated with building.”

“Unfortunately it's a slow process. The time it takes to build a home is quite long at the moment.”