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Capital city units are now offering investors greater value for money than houses, according to RP Data research analyst Cameron Kusher.
Mr Kusher said capital city units are more affordable and offer much better rental yields than houses.
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“Units are often much more affordable and generally there are more options to choose from within inner city areas where, from an investment perspective, they tend to offer better rental returns,” Mr Kusher said.
The recently released August RP Data-Rismark Home Value Index revealed unit prices have risen by just 3.2 per cent compared to a 5.6 per cent increase in house values.
The current gross rental yield for a capital city unit is 4.8 per cent compared to 4.1 per cent for capital city houses, with inner city units typically offering gross rental yields that are much higher than the city-wide benchmark.
Mr Kusher said that in the 12 months to August 2013, there were 66,185 units approved for construction across the country, accounting for a near-record high 41.5 per cent of all dwelling approvals.
“To put this figure in perspective, 10 years ago 34.4 per cent of all dwelling approvals were for units and 20 years ago it was 29.0 per cent.
“Clearly, over the coming years, we are likely to see more and more medium and high density residential product delivered to the market, most of which will be in central areas of our capital cities,” Mr Kusher said.
