Data released by the real estate research company CoreLogic reveals that the "premium for detached houses" surged from 16.7% in March 2020 to 45% last month, meaning that the average house price in Australia is AU$293,950 higher than the average apartment price.

The primary reason for this phenomenon is not a decrease in apartment prices but a sharp rise in the cost of purchasing detached houses. CoreLogic points out that as demand for larger living spaces increases and people prefer to live in more remote areas during the pandemic, the prices of detached houses have skyrocketed. Additionally, the growth in land value and housing supply shortages are also contributing factors to the widening price gap.

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Tim Lawless, research director, stated that as more people seek more spacious housing and are willing and able to live in more remote areas of cities, the premium for detached houses has sharply risen during the pandemic. Although house prices had contracted in the early stages of the interest rate hike cycle, the rate of increase in detached house values exceeded that of apartments, leading to a historic high in the price gap between detached houses and apartments in all major capital cities across Australia.

Sydney holds the highest premium for detached houses, with the greatest increases in the past four years and twelve months. The average premium for detached houses in Sydney is 68.4% higher than that of apartments. Other areas such as Canberra, Adelaide, Brisbane, and Melbourne also have premiums for detached houses above the average, with Darwin being no exception.

However, over the past four years, Darwin, the capital of the Northern Territory, is the only major city where the price gap between detached houses and apartments has narrowed, by 12.2 percentage points. Price gaps in Brisbane, Adelaide, and Hobart also narrowed last year.

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Lawless pointed out that this phenomenon may reflect buyers seeking more affordable housing options, thus turning to purchasing apartments. As buyers are willing to compromise between comfort and space, medium to high-density housing may become more popular because such properties are typically located in areas with convenient transportation and facilities.

Among all areas, the premium for detached houses is most severe in Bellevue Hill in Sydney's eastern suburbs, reaching 525.7%, with a difference of over AU$8 million. Vaucluse follows closely with a premium rate of 499.8%. Lawless believes that these data indicate that more homeowners will turn to purchasing apartments.

He said, "For more and more people, the price of detached houses has exceeded their affordability, especially for first-time buyers or low-income families. As housing affordability remains a major challenge in Australia, the price point for medium to high-density housing may become increasingly popular as buyers are willing to sacrifice space for proximity to basic amenities."