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Units have become a key opportunity for investors and first home buyers, as soaring house prices limit accessible options, particularly in Sydney, Melbourne, and Brisbane, according to real estate business PRD.
In its latest report, Smart Moves Capital Cities Edition: 2nd Half 2025, PRD found that the unit market remained 30–40 per cent cheaper than houses in some areas, making it the more accessible entry point for both first home buyers and investors.
The report identified suburbs within a 20-kilometre radius of the CBD and highlighted investment opportunities using indicators of rental yield, affordability, development activity, and liveability.
Data showed that there continues to be an affordability gap between houses and units, with only 7.8 per cent of Sydney suburbs having affordable houses, compared with 36.9 per cent with affordable units.
Brisbane and Melbourne showed a similar trend, with 22 and 25.4 per cent of suburbs having affordable houses, while 36 per cent of suburbs were affordable for units.
Hobart was the only exception nationwide, where affordable houses (34.7 per cent) outnumbered affordable units (28.2 per cent).
PRD chief economist Dr Diaswati (Asti) Mardiasmo told Broker Daily sister brand Smart Property Investment that investors will have to rethink their aversion to units, as rising rental yields and overall market accessibility made units a logical and profitable investment.
“I get it that there’s strata, there’s body corporate, and that does put people off a lot, but we have to be realistic, in terms of stock that is coming onto the market, there is nothing else that is being built other than units in capital cities,” Mardiasmo told Smart Property Investment.
She said that with slow construction, strong demand, and steady cash rates, units provide medium-term growth opportunities for investors seeking an affordable entry point.
“While normally houses have a high rental yield compared to units, the market is shifting,” Mardiasmo said.
“We’re seeing a pickup in unit rental yields now, because it has become too expensive for people and families to rent houses.”
Across the country, the data showed that for the first time, Brisbane, Melbourne, and Sydney had the same percentage of suburbs with affordable units, at around 36 per cent.
The report found that the top three investment opportunities in Sydney were Bankstown, Lakemba, and Parramatta, with a median unit price between $500,000 and $600,000 and a rental yield of 5.6–6.1 per cent.
In comparison, the top three suburbs for houses in Sydney had a median house price between $1,165,000 and $1,310,000 for a rental yield below 3 per cent.
Similarly, the report showed that units in Bundoora, Broadmeadows, and Box Hill in Melbourne were prime for investment, with a median price below $550,000 and a rental yield between 5.3 and 5.7 per cent.
Mardiasmo said that while Sydney and Melbourne still had plenty of affordable unit markets, Brisbane was starting to dwindle, with the price gap between apartments and houses narrowing.
Data showed that Brisbane median house prices were $1.06 million, while the unit market sat at a median of $755,000.
The report found that Brisbane’s most affordable units were in Logan Central, Zillmere, and Sherwood, with a median price between $425,000 and $680,000, and a rental yield between 3.3 and 5 per cent.
“Even if we are still finding affordable units in Brisbane now, as time goes by and as the cash rate is looking to remain steady, the market will reshuffle,” Mardiasmo said.
Mardiasmo said that Brisbane’s pipeline has been shifting toward premium, high-amenity projects rather than affordable stock, with the pool of genuinely affordable unit options shrinking rapidly.
While capital cities’ apartment markets differ, Mardiasmo said that investors across the country need to work out the dollar value and reconsider purchasing units, as many renters were now willing to pay a slight premium for well-finished assets.
“At the end of the day, if you really want to get into the market, if you really want to invest, unit is something that you need to consider. You cannot just go, no, not going to go to units,” she concluded.
“If we’re talking about opening up your portfolio, opening up your investment possibilities, the fact that there’s just not enough houses, you are going to be battling with owner occupiers, and other investors. You will have to consider units.”
PRD’s suggestion that units may become the darling of property investors comes amid a growing imbalance between supply and demand, which has seen property prices increase by around 7 per cent this year.
Moreover, data from property analytics company Cotality has shown that buyers now need over a decade to save a 20 per cent deposit, with the median house value now 8.9 times higher than the median income.
Indeed, the 2020s have seen housing affordability drop to new lows, with three of the four key national indicators (the price-to-income ratio, years required to save a deposit, and the share of income needed to rent) having all hit record highs in 2025, according to the Cotality Housing Affordability Report.
Both buying and renting have reached unsustainable levels for many Australians, the property analytics company stated, revealing that the median house value is now 8.9 times higher than the median income (up from 6.6 times in 2020).
While median income estimates increased by 20 per cent over the five years to September 2025, they were vastly outpaced by property values and rents, which rose by approximately 53 per cent.
Despite recent rate dips, the cost of servicing a new loan is also “stubbornly high”, requiring 45 per cent of median household income.
The data found that, nationally, it would take 11 years, on average, to save up to the standard 20 per cent deposit for a dwelling.
[Related: Housing affordability hits record lows]