What regions are Millennials moving to?
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Australians are viewing high density living more favourably as land close to the city centres dries up.
New research conducted by RP Data found over the past 15 years unit sales both nationally and for all capital cities increased by approximately 31 per cent.
Estimated August 2011 sales transaction results confirmed that 22,407 capital city dwelling sales were executed over the month with 33,856 of these sales taking place nationally.
Capital city unit sales represented 33.5 per cent of total sales with 20.2 per cent accounting for unit sales within markets outside of capital cities.
Fifteen years ago, 28.2 per cent of capital city home sales were for units while 18.0 per cent of sales in non-capital city markets were for units.
For August 2011, sales estimates indicate that 42.8 per cent of all dwelling sales in Sydney were for units and 33.8 per cent were in Melbourne.
Outside of these two cities, Canberra and Darwin recorded significantly greater proportions of unit sales accounting for 35.9 per cent, and 32.0 per cent of sales respectively.
According to RP Data's Cameron Kusher, the common theme amongst the cities which have recorded above average volumes of unit sales is that three of the four are also the most expensive capital city markets; Darwin being the exception.
Overall, the national results show that although there is significant focus on the unit market, 'non-houses' still account for around one third of all dwelling sales.
"One important point worth mentioning is that over the 12 months to September 2011, the change in capital city unit values (down 1.1 per cent) has outperformed that of capital city houses (down 4.1 per cent) – a trend that has been replicated over the past five years with house values increasing at an average annual rate of 4.8 per cent and unit values increasing by a greater 5.9 per cent for the same period," Mr Kusher said.
Based on the RP Data research out today, over the past year, the proportion of unit sales to overall sales has once again started to increase although these are well below record levels.
Mr Kusher said the reason for the recent improvement is due to affordability barriers remaining high with many buyers looking towards higher density housing options where entry prices tend to be lower.
"Lower levels of affordability have resulted in a renewed focus on units as they are $45,000 more affordable than detached houses across the combined capital cities based on median selling prices over the September 2011 quarter. Dramatic improvements in home loan affordability in 2008 and 2009 saw buyers show a preference for houses rather than units.
"We believe that over the coming years, demand for higher density living will continue to grow as our cities expand.
"Melbourne in particular has done a much better job at providing new higher density housing over recent years than we have seen in the other major capitals. Should other cities follow this lead, a greater supply will likely lead to improvements in housing affordability with developers having to offer competitive pricing to secure sales."