The Sydney pockets where units are selling faster than houses

Units in highly coveted suburbs are being snapped up more quickly than houses by buyers who are priced out of top locations, new figures reveal.

The pandemic lit a fire underneath the housing market last year as people took refuge in their homes during lockdown and working from home became the norm.

The demand for houses sent prices soaring in every corner of Sydney while units trailed behind as they fell out of favour.

But the apartment market appears to be turning a corner, with buyers snapping up units in the regions of Chatswood, Lane Cove and Pittwater nine days sooner than houses, on average, in the six months to April 2021, Domain data shows.

Units in these regions were beginning to make some windfall gains on the housing market’s strong price run as buyers were turning to more affordable alternatives, said Nicola Powell, Domain’s senior research analyst.

“Units are selling quicker because buyers are being priced out of buying a house,” Dr Powell said.

Pittwater’s median house price recorded the largest jump across Sydney, rising 22.4 per cent to $2.27 million in the past year to March 2021, Domain data shows.

This staggering increase has left many buyers behind, who are now keen to buy into the unit market as soon as possible, said Joshua Perry of Belle Property Dee Why.

“A huge amount of people have missed out in the area so people are forcing the hands of the vendor and closing the process sooner,” he said.

Unit sellers were also motivated to accept offers prior to auction to wrap up a sale sooner because buyers had more to choose from than houses, which have been in short supply for months now, Mr Perry said.

Units were also selling more quickly because tired buyers were making stronger offers on apartments in order to nab something before their loan pre-approvals ran out, said Rebecca Mitchell of Raine & Horne Lane Cove.

“The buyers have been looking for some time and they know what they want and they’re making good, strong offers in the first couple of weeks,” she said.

But the gap between days on market for houses and units looks to be closing, with several inner-city regions recording marginal differences.

The time it takes to sell houses and units is on an even keel in the regions of Kogarah and Rockdale, North Sydney and Mosman, Cronulla, Miranda and Caringbah, which takes in large swathes of Sydney suburbs close to the CBD.

Dr Powell said apartments were becoming more attractive to investors again due to the city’s improving rental market.

“While we have seen a disruption in the CBD market we’re starting to see investors come back to the market now,” she said. “The fact that we’re seeing the rental market turn a corner in terms of performance means they could be looking to areas like the inner city.”

The areas where units take longer to sell than houses

However, the regions where houses are as rare as hens’ teeth in comparison to the glut of apartments were weighing on the unit market.

Units in the region of Parramatta, which takes in the suburbs of Westmead, Harris Park, Pendle Hill, took more than twice as long as houses to sell.

It was a similar story in the region of Pennants Hill and Epping, where units took on average 65 days longer to sell than houses.

Buyers in the unit market in these areas were spoilt for choice, affording them the time to shop around, said Catherine Murphy of The Agency North.

“A buyer a few years ago potentially had to look at three or four units. There’s now pages and pages of these units that fall into their criteria,” she said. “It’s basically an oversupply versus demand.”

In areas further west of the city, units were lingering on the market because buyers were stretching themselves in order to buy into the housing market instead, said Michael Makrinakis of Ray White Green Valley.

In Fairfield, units were taking one and half times longer to sell than houses as they remained on the market for an average of 143 days compared to 90 days for a freestanding home, Domain data shows.

“If you do see a unit for $550,000 you [might] rather spend a little bit more to get yourself a duplex or a townhouse, something freestanding,” Mr Makrinakis said. “You can get house and land packages for a little more than a unit these days.”