CoreLogic's latest data shows an interesting trend: over the past few months, apartment prices in six out of ten major cities have risen faster than house prices, with the gap reaching up to 11 times. This data suggests that investors are seeking better rental returns, and buyers are looking for more affordable options.

Apartment prices are rising while house price growth is slowing down. Tim Lawless from CoreLogic believes that apartment prices may continue to increase faster than house prices until affordability improves and housing supply increases. He stated, "We may be in a phase where apartment prices are starting to close the gap with houses due to the large price disparity. With limited supply and rising demand from first-time homebuyers avoiding rental pressure, apartment values could continue to rise in the short to medium term."

Scott Kuru from Freedom Property Investors points out that the growth in rental yields and capital growth in prime locations is attracting more investors to apartments. CoreLogic's data shows that the rental yield for apartments in major cities has reached 4.5%. Kuru added, "Investors are hunting for apartments because they are cheaper and offer yields around 5%, which is very reasonable for cash flow. We expect apartment prices to rise sharply in the coming years due to limited new supply and strong immigration."

Apartment Performance in Major Cities of Australia

In Brisbane, apartment prices in the Teneriffe area rose by 6.2%, outpacing house prices, which dropped by 4.8%. Similarly, in Kippa-Ring, apartment prices increased nine times faster than house prices, while in Mount Warren Park and Eagleby, apartment prices increased eight times more than house prices.

In Sydney, apartments in Picton, located 90 km southwest of the city, saw price increases seven times higher than houses. The areas of Telopea, Brighton-Le-Sands, and Strathfield South also showed high demand for apartments, with price increases five times higher than houses.

In Melbourne, apartments in Ascot Vale and Port Melbourne saw price increases six times faster than houses, while Essendon, Mont Albert, and St Kilda saw price increases five times higher than houses.

In summary, apartments are currently outperforming houses due to affordability issues and a tight rental market. However, this could change if more apartments become available. At present, apartment prices are rising faster than house prices due to the shortage. If you are considering purchasing, choosing a high-quality apartment in a prime location with complete amenities could be a smart choice, as these apartments are often a better long-term investment.