Australians in capital cities are increasingly opting for townhouses, terraces and villas over stand-alone houses, according to a new report from Bankwest.
Since 1997, over 95 per cent of dwelling approvals in inner Melbourne, Sydney and Brisbane were for medium density complexes, the Bankwest report showed.
Perth was the only city to see a fall in medium density housing in this period.
Bankwest Retail Chief Executive Vittoria Short said the high price of housing was a major factor behind the shift.
"Australia's high property prices have made the Australian dream of a stand-alone house in the suburbs harder to achieve," she said.
"People are increasingly choosing medium density housing as a more affordable alternative."
Perth was able to buck the trend due to a strong economy and distinctive geography.
"Higher than average wages and a sprawling city mean that Perth's residents aren't facing exactly the same space and affordability issues as those on the East Coast," Ms Shortt said.
However, CEO of Multifocus Properties Philippe Brach said Australians were also changing their lifestyles and preferences.
"The attitude to accommodation is changing in Australia," he said.
"People want to live in areas where they don't have to mow the lawn. They want to live close to the action."
In addition, Mr Brach said households are shrinking, with one or two person households becoming more common than thirty years ago.
"At the beginning of the 21st century, the density per dwelling was 4.25 people per dwelling. There are now around 2.6," he said.
Couples or single people were more likely to choose smaller, easy-to-maintain dwellings, he suggested.