Something is happening in the Australian property market that most buyers have not fully registered yet.
Units are outperforming houses. Not in one city. Not in one price bracket. Across every major Australian capital.
This is not a minor trend. It is a structural shift driven by affordability, policy, and buyer behaviour that is reshaping which property type makes the most sense to buy right now.
Domain property market forecasting published in June 2026 shows units outperforming houses in FY2027 across every major capital city in Australia.
In Sydney, units are forecast to outperform houses by 4 percentage points. Houses are forecast to fall by around 5% over FY2027. Units are forecast to fall by around 1%. That is a meaningful difference for a buyer choosing between the two property types in the same market.
In Melbourne, units outperform houses by 5 percentage points. Houses are forecast to fall around 6%, units around 1%.
In Brisbane, units are forecast to grow 7% against houses at 5%.
In Perth, units are forecast to grow 9% against houses at 7%.
Even in markets where both property types are falling, units are holding up better than houses. In markets where both are growing, units are growing faster.
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Affordability has become a binding constraint.
Three rate hikes in the first half of 2026 have removed around 7 to 8% of borrowing capacity from the market. When buyers can borrow less, they buy less. The first thing that changes is property type. Buyers who were targeting houses move to units. Buyers who were targeting units in premium suburbs move to units in more accessible suburbs.
That redirection of demand is pushing more buyers into the unit market at the same time as the established house market loses investor support from the negative gearing changes. Units absorb the demand. Houses absorb the pressure.
The First Home Buyer schemes reach units more than houses in most capital cities.
The federal First Home Guarantee and state-based equivalents apply to purchases within property price caps. In Sydney, Brisbane, and Perth, those caps cover a much larger proportion of the unit market than the house market. First home buyers who are actively using these schemes are effectively being directed toward units by the price cap structure.
That creates a specific demand floor under the unit market from a buyer cohort that is not disappearing regardless of rate conditions.
The house-to-unit premium is at record levels and compressing.
In Sydney, the premium for a house over a comparable unit has reached 111%. That gap is unsustainable and it is starting to compress. As borrowing capacity falls and affordability tightens, the justification for paying a 111% premium for a house over a unit diminishes. More buyers accept the trade and move to units. That demand supports unit prices while house prices face additional pressure from the weight of the premium itself.
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For first home buyers: Units are where the schemes reach, where the price points are accessible, and where the relative performance advantage is most pronounced in Sydney and Melbourne. Buying a unit now rather than waiting for a house means entering a market where the price trajectory is more favourable than the alternative.
For investors: The combination of negative gearing retained on new builds, higher depreciation deductions on new construction, and units outperforming houses in every major market creates a compelling case for new off the plan unit investment. The tax environment now actively favours new units over established houses in a way it has not previously.
For upgraders: If you currently own a house and are considering upsizing, the relative performance data suggests holding your position or moving carefully. The house market is facing more headwinds than the unit market in the near term.
Off the plan unit purchases through Coposit combine the unit market's relative outperformance with the additional advantages of new construction -- higher depreciation, builder warranty, lower initial strata costs -- and the deposit flexibility of $10,000 upfront with weekly instalments.
For a buyer who is weighing units against houses in the current market, the data is pointing in one direction.
Browse current off the plan unit listings across NSW, QLD, and WA on the Coposit projects page, download the Coposit app, or contact Coposit the team to understand which projects suit your situation.
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