Brisbane's sales market, trends in Brisbane property

Brisbane apartments v houses: will the price gap continue to grow?

The latest data shows Brisbane’s houses are now 1.8 times the price of our city’s apartments. After keeping pace with each other through the 1980’s and 1990’s, the past 10 years especially have seen our median house climb well ahead to now reach $828,000. Meanwhile our median apartment price is just $468,000.

So what happens next?

There’s no doubt we’ve witnessed some exceptional price growth in Brisbane apartments this past year, with the latest CoreLogic Home Value Index reporting a 14.4% rise. But our houses have leapt an incredible 33% in the same period. Take a look at the graph below to see the change. The flat-lining apartment prices during 2014 to 2018 might be largely explained by the tsunami of additional supply, new inner-city towers rising at rapid pace, while new Brisbane housing supply remained constrained.

But what has changed with this latest shift and the much faster rise in house prices compared with their medium and high density cousins?

Brisbane apartments

There’s always critics lining up to challenge the appeal of Brisbane apartments, questioning their lifestyle offer, or suggesting most of us really want a big yard (for something called a Hills Hoist and a Victa?!) But our agency’s team works with tenants and buyers every day who love their vertical villages and the convenience of apartments. Many could not imagine life in a house. Many of them are families, so this is not just a choice for pre and post kids households. That’s not been the case for a long time.

I’m a big fan of apartments personally and my belief in them grows more as I get closer to my ‘recreational years’, when I don’t want to care for yards and gutters and all those house-like maintenance items. But this gap in prices does have us wondering.

Has this been an opportunistic change these past few years, with home buyers taking advantage of record low interest rates to upgrade their dwelling and spend more? Forget the cost of buying – many of us focus on the cost of owning.  And even with rising prices that’s been low.

Or is this all about COVID and wanting bigger homes? Temporary now we can all escape each other? Or permanent because we no longer want to go back to workplaces?

Are apartments due a big catch-up, with their prices set to climb at a faster rate? Historically this happens with Brisbane’s dwelling prices compared with Sydney, for example, where we have always regained some ground as their affordability crisis bites.

Brisbane’s houses are now high at $828,000 – that’s our median but you won’t easily find a good one inside the 5km radius of the CBD – and are now well beyond reach for most first home buyers. Investors, similarly, might not want to dive so deeply into the market by spending that much, especially with rental returns that are lower despite rising rents. As traditional house buyer demand (from families and upgraders) fades, will apartments be the dwelling of choice for a growing audience?

We don’t have the answers, but the graph raises important questions for every Brisbane apartment owner. Will the lines continue to diverge? Or are we sitting on an asset that’s about to have its time in the sun?

Please share your thoughts in the comments below!