Recent trends reveal a fascinating shift in the housing market: the pandemic-driven appetite for larger homes is making way for a growing preference for smaller, more compact living spaces.
This is particularly evident in the rental market.
At the height of the pandemic, we witnessed an unprecedented demand for larger homes.
People, adapting to remote work and a transformed lifestyle, sought solace in the spaciousness of suburban houses.
Inner-city units, once coveted, suddenly faced a surge in vacancies as CBDs turned ghostly and borders slammed shut.
Fast forward to today, and the data tells a new story.
According to PropTrack, rental markets are buzzing again but with a twist.
Units, once lagging behind houses in leasing speed, are now being snapped up faster.
In fact, they’re leasing 36% quicker than they did back in November 2020, while houses have only seen a 9% increase in leasing speed.
This isn’t just a rebound; it’s a renaissance of unit living.
Search trends: units gaining ground
PropTrack’s data show that during late 2020, realestate.com.au saw a significant lean towards house searches – they dominated 56% of all rental queries.
But as we emerged from pandemic restrictions, this trend saw a reversal.
Now, more people are scouring for units, with their search share jumping by 10 percentage points in three years.
The pricing landscape further illustrates this shift.
Previously, renters were willing to pay a hefty premium for the extra space houses offered.
In our major cities, this premium reached as high as 40% for houses over units.
Fast forward to the present, and this gap has significantly narrowed, indicating a renewed appreciation for the practicality and affordability of unit living.
Why this change, you ask?
The reopening of offices and the gradual return to in-person work have reignited the allure of living close to CBDs.
Units, typically nestled near public transport and city centres, offer both convenience and cost-effectiveness.
Moreover, with a higher vacancy rate compared to houses, units present renters with more choices and less competition.
What lies ahead?
As we adapt to hybrid working models and city life rebounds, the appeal of units could further intensify.
However, the ongoing cost of living crisis might also renew interest in shared housing, potentially swinging some preference back towards larger homes.
The market is dynamic, and as always, it’s fascinating to watch how these trends unfold.
