It’s one of the first decisions every property investor faces: house or unit? Both can work. But the data over 30 years tells a clear story about which asset type builds more wealth, and why.
The answer isn’t as simple as “always buy houses.” Your budget, your strategy, and your portfolio position all matter. But if you’re going to put hundreds of thousands of dollars into a single asset, you should understand what the numbers actually say.
30 years of growth data
CoreLogic’s long-term data is the most useful starting point here.
Across Australia’s combined capital cities, house values have increased by 453% over the past 30 years. Unit values have increased by 307% over the same period. In regional markets, the gap narrows slightly: houses up 314%, units up 213%.
Annualised, that’s roughly 6.8% per year for houses versus 5.1% for units nationally. A 1.7 percentage point difference doesn’t sound like much. But compounding changes everything.
A $500,000 house growing at 6.8% per year is worth approximately $1.87 million after 20 years. A $500,000 unit growing at 5.1% is worth approximately $1.36 million. Same starting price, same holding period, $510,000 difference.
That gap is the single biggest reason most experienced investors lean toward houses for capital growth.
Why houses grow faster: the land factor
Buildings depreciate. Land appreciates. That’s the structural driver behind the growth gap.
When you buy a house on its own block, you’re buying direct exposure to land value. In established suburbs with limited supply, that land becomes scarcer over time as populations grow. Scarcity drives price.
When you buy a unit in a 50-lot apartment complex, you own 1/50th of the building’s land value. Even if the land underneath appreciates strongly, your share of that growth is diluted across every lot holder. The majority of what you’ve paid for is the building itself, and that building is depreciating from the day it was built.
There’s a second factor. When demand rises in an area, developers can build more apartments on available sites. New supply enters the market and moderates price growth. You can’t do that with established houses in tightly held suburbs. There’s no more land to build on.
This is why the house-unit growth gap is widest in cities like Sydney, where land scarcity is most acute, and narrower in regional centres where land is more available.
Where units actually win: rental yield
Units consistently deliver higher gross rental yields than houses. Nationally, average gross yields for houses in capital cities sit around 3.8% to 4.2%, compared to 4.5% to 5.5% for units.
The reason is straightforward: units have lower purchase prices relative to the rent they generate. A $500,000 unit renting for $500 per week delivers a 5.2% gross yield. A $900,000 house renting for $600 per week delivers 3.5%.
For investors focused on cash flow, or those who need better serviceability to expand their portfolio, that yield advantage matters. Our guide to capital growth vs rental yield covers how to balance these two forces across a portfolio.
The strata cost that erodes unit yields
Here’s where the yield advantage gets complicated.
Units come with strata levies (called body corporate fees in Queensland). These cover building insurance, common area maintenance, sinking fund contributions, and management fees.
Typical annual strata costs in 2026:
- Small low-rise complex, no facilities: $2,000 to $4,000 per year
- Medium complex with pool or gym: $4,000 to $7,000 per year
- High-rise with concierge and amenities: $6,000 to $15,000+ per year
A unit with a 5.2% gross yield and $6,000 in annual strata fees might deliver a net yield comparable to a house at 3.8% with no strata. The headline yield number for units is often misleading without factoring in these costs.
And strata fees aren’t fixed. They rise over time, often faster than rents. Older buildings with deferred maintenance can hit owners with special levies for major repairs, waterproofing, cladding remediation, or structural work. These can run from a few thousand dollars to six figures per lot in extreme cases. You have no control over when they’re issued or how much they cost.
With a house, maintenance is variable but it’s your decision. You choose when to replace the roof, repaint, or fix the fence. With a unit, the owners corporation makes those calls for you, and you pay your share whether you agree or not.
Depreciation: the one tax advantage units have
Units typically offer higher depreciation deductions than houses. The building component (depreciable at 2.5% per year for up to 40 years) makes up a larger share of a unit’s value, and apartment complexes include shared plant and equipment like lifts, air conditioning systems, security, and common area fit-outs that generate additional claims.
For investors using negative gearing, this can improve after-tax cash flow in the early years. But depreciation is a tax timing benefit, not a wealth creation tool. It reduces your cost base, which means higher capital gains tax when you sell. Talk to your accountant about how this applies to your situation.
The supply question in 2026
Australia is currently building approximately 60,000 apartments per year, against demand for roughly 75,000 according to CBRE. That’s an annual shortfall of 15,000 units, compounding over time.
National rental vacancy rates sit at approximately 1.2% to 1.8% across capital cities, well below the 2.5% decade average and far below the 4% to 5% that represents a balanced market.
This undersupply supports both rents and values for existing units in the short to medium term. But it doesn’t change the long-term structural dynamics. As development sites become available and construction catches up, new apartment supply can enter the market in ways that new houses in established suburbs simply can’t.
Current median prices: houses vs units
To give you a sense of the entry point difference:
| City | Median house | Median unit | Gap |
|---|---|---|---|
| Sydney | $1,607,000 | $903,000 | $704,000 |
| Melbourne | $978,000 | $642,000 | $336,000 |
| Brisbane | $852,000 | ~$550,000 | ~$302,000 |
| Perth | $728,000 | ~$480,000 | ~$248,000 |
| Canberra | $1,052,000 | $598,000 | $454,000 |
| Hobart | $779,000 | $574,000 | $205,000 |
For many investors, particularly those buying their first or second property, the entry point difference is the real constraint. A house in Sydney requires significantly more deposit and borrowing capacity than a unit. For investors navigating this with limited capital, our beginner’s guide breaks down the numbers.
When a unit can make sense
Despite the long-term growth advantage of houses, there are situations where a unit is the right call.
When your budget doesn’t stretch to a house in a strong location. A well-located unit in a supply-constrained, established suburb will often outperform a poorly located house on the outskirts. Location matters more than dwelling type. A $600,000 unit 5km from the Brisbane CBD will likely beat a $600,000 house 45km out with no infrastructure and oversupply risk.
When you need yield to sustain your portfolio. If you already own growth-focused houses and your holding costs are stretching your cash flow, a higher-yielding unit can balance the portfolio and free up borrowing capacity for your next purchase.
When it’s a small block unit, not a high-rise apartment. A villa unit, townhouse, or unit in a small complex of 4 to 8 has a higher land-to-building ratio than a 200-lot tower. These “unit” types often behave more like houses in terms of capital growth, especially in established suburbs.
When you’re buying interstate on a budget. Entry prices for units in cities like Brisbane and Perth are significantly lower than houses, letting you access strong markets with less capital.
When a house is clearly better
For most investors building a long-term portfolio, houses are the stronger wealth-building asset. The cases where this is clearest:
You’re early in your investment journey. Your first property sets the trajectory. A house in a growth suburb compounds equity that you’ll leverage for property two and three. Starting with a slow-growth unit makes it harder to build the equity needed to expand.
You have the borrowing capacity. If you can afford a house in a well-located suburb, the 30-year data strongly favours doing so.
You’re investing for 10+ years. The compounding growth gap between houses and units widens dramatically over longer holding periods. Over 10 years, the difference is significant. Over 20, it’s substantial.
What actually matters most
The house vs unit debate matters, but location matters more. A house in a declining regional town with no employment diversity will underperform a well-located unit in a supply-constrained capital city suburb every time.
The best investment decisions are driven by data, not by rules of thumb. What does the suburb’s growth history look like? What’s the vacancy rate? What’s the supply pipeline? What’s the land-to-building ratio? These questions matter more than “house or unit” in isolation.
At Australian Property Experts, we score every property across 50+ data points through our Apex platform, including land content, supply risk, and growth fundamentals. The dwelling type is one input, not the whole answer.
This is general information only and not financial advice. Speak to a qualified professional before making investment decisions.
If you want help working out which property type fits your strategy and budget, book a free discovery call.