The capital-city suburbs where unit sales are making more profit than houses
Apartments are making their owners more profit at sale than houses in some areas of the country – and sometimes up to three times more.
In one suburb of Melbourne, for instance, units are being sold for nearly 150 per cent more than they were bought for, bringing their vendors median windfalls of up to half a million dollars.
The stunning figures have been revealed by Domain’s new Profit & Loss Report, examining residential resales and finding how much Australians are making – and occasionally losing – on different types, and locations, of property.
One of the most startling findings is that units in some places are realising a much bigger profit on resale than houses.
| Suburb | City | Unit profit | Houses profit | Unit profit premium |
| Evanston | Adelaide | 142.9% ($200,000) | 46.0% ($145,000) | 96.9% |
| Rosanna | Melbourne | 147.1% ($500,000) | 60.5% ($447,500) | 86.6% |
| Semaphore Park | Adelaide | 156.0% ($312,000) | 85.2% ($371,000) | 70.8% |
| Pinjarra | Perth | 128.5% ($210,750) | 70.9% ($198,500) | 57.6% |
| MacLeod | Melbourne | 108.1% ($465,000) | 58.8% ($414,750) | 49.3% |
| Long Jetty | Sydney | 130.2% ($385,500) | 84.5% ($403,000) | 45.7% |
| Heathmont | Melbourne | 105.5% ($371,500) | 61.7% ($385,000) | 43.8% |
| Modbury | Adelaide | 125.0% ($235,000) | 82.9% ($304,000) | 42.1% |
| Aspendale | Melbourne | 123.9% ($452,350) | 86.5% ($562,000) | 37.4% |
| Kilsyth | Melbourne | 93.4% ($344,000) | 58.3% ($272,750) | 35.1% |
“It probably does say a lot about the demand for affordability, with many of these outperforming units located in middle or outer-ring suburbs that aren’t as expensive as those closer in,” said Domain chief of research & economics Dr Nicola Powell.
“These aren’t necessarily five-storey blocks of units, but often lower-rise or townhouses. Some of these small locations have a scarcity of units too, so there’s a lot of competition for them that drives prices up.”
These include suburbs like Evanston, north of Adelaide, where units are making a 142.9 per cent profit, compared to houses’ 46 per cent, which works out to a 96.9 percentage point premium.
Rosanna in Melbourne is also seeing an apartment bonanza, with a 147.1 per cent median return of $500,000, as against houses’ 60.5 per cent – an 86.6 percentage point premium.
Meanwhile, in Perth, the most profitable apartments were in Pinjarra with a 128.5 per cent profit against 70.9 per cent for houses – a 57.6 percentage point premium. In NSW, apartments in Long Jetty north of Sydney, enjoyed a 130.2 per cent return – a 45.7 percentage point premium over houses’ 84.5 per cent.
In Long Jetty, on the Central Coast south of The Entrance, merchant ship captain Zoran Savic said he was delighted to hear of such strong returns now that he was selling his two-bedroom apartment at 6/5-7 Centennial Avenue with a price guide of $600,000.
“The location is great, close to the lake and the ocean beaches, and it’s a very spacious apartment with a large balcony,” said Savic, 64. “I can really understand why apartments here are so popular. They offer a great low-maintenance lifestyle in a beautiful place.”
Selling agent, Ian Boyle of Ray White Berkeley Vale, said it was a very popular spot for apartments.
“Prices went a bit crazy in Long Jetty, especially since COVID,” he said. “It’s an area that’s changed hugely from its old-fibro-shack days.
“It’s become what Newtown is to Sydney. There are a lot of arty shops with crystals and tarot cards, and it’s turned into a very trendy suburb which, while still affordable, is commanding some pretty good money at the moment.”
As budgets shift, buyers are choosing between location and space, according to the Domain report, with many opting for more affordable apartments close to the CBD over houses in suburbs further away. Many of the suburbs around the country where unit owners are receiving much better returns than houses are in this “compromise zone”, Powell said.
“Apartments are definitely becoming more popular over time with their affordability and the lifestyle they offer,” Powell said. “Also, residential resale figures indicate that people are now holding them for longer. As a result, I think we will see developers building more units.”
Of those pockets where units make more profit, Evanston, for instance, south of Gawler, is much more affordable than suburbs closer to the Adelaide CBD.
“The price point is very attractive there as the inner suburbs are now too expensive,” said Nicolle Davis of Smith Partners Real Estate.
“Everything north and north-east from the city is in demand now, and many of the apartments – like a two-bedroom one I have in nearby Willaston for $399,000 to $419,000 – have decent-sized rooms. They’re in a lot of demand.”
Rosanna, a north-eastern suburb of Melbourne, is another standout for profit-making units.
It’s a suburb really on the up, says John Levingston of Miles Real Estate Ivanhoe, whose agency is selling a two-bedroom apartment there for $520,000.
“They’ve built a new train station there which has made a big difference to the suburb, they’re putting in a Woolworths, it has a new library, and the government is spending billions of dollars on developing infrastructure, which Rosanna is benefitting from,” he said.
“It’s very attractive as it has great parklands and a lot of greenery as well as a cosmopolitan, family-friendly lifestyle.”
Charter Keck Cramer research and strategy team director Richard Temlett, said houses generally do better on resales because of their land component which tends to see better capital growth. High-rise units, without land, often don’t do as well.
“But in a lot of middle-ring areas, there are villa units and townhouses which do have an element of land, so they can see their values grow,” the apartment expert said. “There are certain areas where established units have prices that are increasing, particularly when they’ve been undervalued in the past.
“We’ve now had 13 rate rises and so people’s purchasing power has been cut … so they’re looking for more affordable homes, and some of this demand is being deflected to apartments. More and more people are now opting for them as they don’t want to live too far from the city, and they’d like a view or to be in a particular school zone.”
Other suburbs where units are currently selling for a higher profit than houses are Adelaide’s Semaphore Park and Modbury, and Melbourne’s MacLeod, Heathmont, Aspendale and Kilsyth.
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