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Apartment market heats up as prices rise
Apartments now make up almost half of all sales nationwide, fuelled by lifestyle trends and soaring house prices, with demand expected to grow further as first home buyers enter the market.
In the year to August, the Australian apartment market has seen an upturn, accounting for 42 per cent of all property transactions nationally or 163,246 sales, according to a Nuestar and Hotspotting analysis.
The analysis by Nuestar and Hotspotting reveals that 42 per cent of all property transactions nationally – 163,246 sales – were apartments in the year to August 2025, underscoring a significant shift in buyer behaviour.
Nuestar founder and director of property, Michael Wilkins, said the data showed the unit market momentum signalled a shift in buyer behaviour driven by lifestyle and affordability.
Across the country, Sydney recorded the highest share of apartment sales, accounting for 51 per cent of the property transactions over the past two quarters.
In Greater Sydney, 53 per cent of units in the June quarter were bought by first home buyers, up from 51 per cent in the first quarter.
Similarly, Melbourne recorded its highest quarterly unit sales since 2021, with the apartment market accounting for 37 per cent of the sales in the last six months.
“Brisbane has also seen notable growth, with units now accounting for 42 per cent of all sales,” Wilkins said.
“Suburbs such as Fortitude Valley, Indooroopilly and Windsor are leading the charge, driven by proximity to transport, education and lifestyle precincts.”
Canberra’s apartment share rose from 31 per cent to 40 per cent, while Darwin increased from 31 per cent to 36 per cent, highlighting renewed demand in both markets.
Wilkins said that the unit market momentum has not been limited to capital cities, as key coastal markets have also seen an increase in apartment sales.
“This isn’t just a capital city story because it’s playing out in lifestyle and regional hubs like the Gold Coast, Gosford, Newcastle and Wollongong as well,” he said.
Hotspotting director Terry Ryder said that while dwelling prices have been a key factor for buyers to consider when choosing unit living, location and lifestyle have also driven the enthusiasm.
“Affordability is the key driver because in many of these markets, apartments are the only viable option for buyers priced out of the housing sector, which is why we’re seeing such strong uptake in places like Brisbane and Canberra,” Ryder said.
“They’re becoming the strategic choice for buyers who want location, lifestyle and long-term value,” he said.
With the launch of the First Home Guarantee Scheme, Wilkins said the apartment momentum will grow further, particularly in urban areas where units offer a more affordable entry point.
“The impact will be both immediate and far-reaching with the combination of increased borrowing capacity and reduced upfront costs set to supercharge demand in the apartment sector,” Wilkins said.
“We anticipate a surge in unit sales with pent-up demand and improved affordability likely to translate into upward pressure on prices, particularly in areas where supply is constrained.”
However, Wilkins urged buyers and investors to remain aware of the potential downsides of apartment ownership and work with credible, accredited developers, thereby safeguarding against construction risks.
“With developers increasingly focused on build-to-rent models and construction costs remaining high, new supply is limited,” he said.
“Combined with higher gross yields and government support, this supply-demand imbalance is expected to intensify competition and drive further price growth in the unit sector,” Wilkins concluded.
