The Great Australian Dream still exists, it’s just that - for many - it now means owning an apartment, not a house with a white picket fence.

As property prices continue to grow, the dream of owning a freestanding house has morphed into the dream of owning an apartment - for more and more Australians.

Apartment living is no longer just a financial choice, but a conscious decision to seek out a different way of living - a more affordable and low-maintenance lifestyle.

The percentage of Australians who live in a freestanding house has been declining since the beginning of the new millennium. 

About a third of properties in Australia are now attached properties including apartments. As our population continues to grow and household sizes shrink, apartment living has become more attractive. 

As a result, it has also become a more appealing option for investors as well. The once dominant paradigm of real estate that houses on land showed superior capital growth to apartments is no longer the case. 

As the new edition of the “Rise and Rise of Apartments” report shows, apartment values are now rising faster than house values in most suburbs throughout Australia including regional locations. 

In 2023 apartment price growth was stronger than house price growth in 46% of suburbs nationally; by the end of 2024 that was the case in over 60% of suburbs.

The report, published by Hotspotting in association with national marketing company Nuestar, shows a growing number of important cohorts are pushing demand for apartments higher - including those looking for affordability, downsizing, location, safety & security and a first step onto the property ladder. 

The price differential is a big factor. Even in the most affordable markets, the price difference between a house and an apartment is substantial. PropTrack data as of February 2025, shows Sydney has the biggest gap of 55%; followed by the ACT, 45%; Darwin and Melbourne, 42%; and Perth, 39%.

Growing demand means apartment price growth is tipped to outpace house price growth in a variety of locations in 2025, as it did in many places last year.

Suburbs in which apartments dominate the dwelling mix are now among the most powerful markets in Australia. 

The market share of apartments is now consistently well above 50% of Greater Sydney sales. In Brisbane, apartments account for 37% of property sales, compared with 32% a year ago. But, the most notable growth pattern is in Canberra, with apartments accounting for 47% of sales compared to 32% at the same time last year.

It’s not just owner-occupiers who are emerging as a growing buyer force in apartment markets - investors are also strong. Apartments offer investors more affordable options and better rental yields in desirable locations.

In many of the inner-city precincts in our biggest cities, houses can typically cost more than $2 million, but apartments can be bought for less than half of that price level in the same suburbs, in many cases.

The more affordable entry point generally means that rental yields are significantly higher for apartments, a key consideration in times of still-high interest rates. 

That’s why apartments will be an important consideration for investors seeking opportunities in 2025.