--- title: Units & Apartments Market in 2026 description: Investor and buyer insights for financing units and apartments compared to houses in 2026 image: https://blog.mcpfinancial.com.au/hubfs/Brisbane%20Marina.jpg --- [![MCP Financial Services](https://blog.mcpfinancial.com.au/hs-fs/hubfs/MCPFinancial_2022/logo-mcpfinancial.png?width=269&height=121&name=logo-mcpfinancial.png "MCP Financial Services")](https://www.mcpfinancial.com.au/) [![logo-white](https://blog.mcpfinancial.com.au/hubfs/logo-white.svg "logo-white")](https://www.mcpfinancial.com.au) - [ABOUT](https://www.mcpfinancial.com.au/about) - [About MCP Financial](https://www.mcpfinancial.com.au/about) - [Learning & Resources](https://www.mcpfinancial.com.au/about/learning-resources) - [Locations](https://www.mcpfinancial.com.au/about/locations) - [BLOG](https://blog.mcpfinancial.com.au) - [CONTACT](https://www.mcpfinancial.com.au/contact) - [Client Services](https://www.mcpfinancial.com.au/client-services) - [Commercial Finance](https://www.mcpfinancial.com.au/client-services/commercial-finance) - [Mortgage Finance](https://www.mcpfinancial.com.au/client-services/mortgage-finance) - [Equipment Finance](https://www.mcpfinancial.com.au/client-services/equipment-finance) - [Professional Services Finance](https://www.mcpfinancial.com.au/professional-services-finance) - [Agribusiness Finance](https://www.mcpfinancial.com.au/agribusiness) - [SMSF Finance](https://www.mcpfinancial.com.au/client-services/smsf-finance) - [Consulting & Connections](https://www.mcpfinancial.com.au/consulting-connections) - [Broker Services](https://www.mcpfinancial.com.au/broking-advisory) - [Your Broking Career](https://www.mcpfinancial.com.au/broking-advisory/your-broking-career) - [Your Broking Business](https://www.mcpfinancial.com.au/broking-advisory/your-broking-business) - [Sell Your Loan Book](https://www.mcpfinancial.com.au/broking-advisory/sell-your-loan-book) - [Buying a Loan Book](https://www.mcpfinancial.com.au/buying-a-loan-book) - [Licensing, Aggregation & Practice Management](https://www.mcpfinancial.com.au/licensing-aggregation-practice-management) - [Referral & Partner Services](https://www.mcpfinancial.com.au/partner) - [Independent Finance Brokers](https://www.mcpfinancial.com.au/independent-finance-brokers) - [Accountants](https://www.mcpfinancial.com.au/referral-partner-services-accountants-0) - [Professional Services Firms](https://www.mcpfinancial.com.au/other-professional-services) - [BLOG](https://blog.mcpfinancial.com.au) - [CONTACT](https://www.mcpfinancial.com.au/contact) - [CLIENT SERVICES](https://www.mcpfinancial.com.au/client-services) - [Commercial Finance](https://www.mcpfinancial.com.au/client-services/commercial-finance) - [Mortgage Finance](https://www.mcpfinancial.com.au/client-services/mortgage-finance) - [Equipment Finance](https://www.mcpfinancial.com.au/client-services/equipment-finance) - [Professional Services Finance](https://www.mcpfinancial.com.au/professional-services-finance) - [SMSF Finance ](https://www.mcpfinancial.com.au/client-services/smsf-finance) - [Agribusiness](https://www.mcpfinancial.com.au/agribusiness) - [Consulting & Connections](https://www.mcpfinancial.com.au/consulting-connections) - [BROKER SERVICES](https://www.mcpfinancial.com.au/broking-advisory) - [Your Broking Career](https://www.mcpfinancial.com.au/broking-advisory/your-broking-career) - [Your Broking Business](https://www.mcpfinancial.com.au/broking-advisory/your-broking-business) - [Sell Your Loan Book](https://www.mcpfinancial.com.au/broking-advisory/sell-your-loan-book) - [Buying a Loan Book](https://www.mcpfinancial.com.au/buying-a-loan-book) - [Licensing, Aggregation & Practice Management](https://www.mcpfinancial.com.au/licensing-aggregation-practice-management) - [REFERRAL & PARTNER SERVICES](https://www.mcpfinancial.com.au/partner) - [Independent Finance Brokers](https://www.mcpfinancial.com.au/independent-finance-brokers) - [Accountants](https://www.mcpfinancial.com.au/referral-partner-services-accountants-0) - [Professional Services Firms](https://www.mcpfinancial.com.au/other-professional-services) - [ABOUT](https://www.mcpfinancial.com.au/about) - [About MCP Financial](https://www.mcpfinancial.com.au/about) - [Learning & Resources](https://www.mcpfinancial.com.au/about/learning-resources) - [Locations](https://www.mcpfinancial.com.au/about/locations) 4.05.2026 # Units & Apartments Market in 2026 Where Does the Market Stand in 2026? ![Unit and Apartment lending in 2026](https://blog.mcpfinancial.com.au/hubfs/Brisbane%20Marina.jpg) ### Share this article on: - [![Linkedin](https://blog.mcpfinancial.com.au/hubfs/MCPFinancial_2022/sharing-linkedin.svg)](http://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fblog.mcpfinancial.com.au%2Funits-apartments-market-2026) - [![Email](https://blog.mcpfinancial.com.au/hubfs/MCPFinancial_2022/sharing-email.svg)](mailto:?subject=Check%20out%20https%3A%2F%2Fblog.mcpfinancial.com.au%2Funits-apartments-market-2026%20&body=Check%20out%20https%3A%2F%2Fblog.mcpfinancial.com.au%2Funits-apartments-market-2026) Units and apartments are a significant part of Australia's housing and investment property market. This article is [an update to our June 2022 piece on financing for unit developments](https://blog.mcpfinancial.com.au/how-to-obtain-financing-for-unit-development), and it is interesting to compare what’s changed in four years. In 2022, the cash rate was 0.10%, and interest rates were beginning to rise after an extended period of very low rates. At the time, we flagged that reduced borrowing capacity would likely push more buyers towards apartments. Four years on, that thesis has largely played out, but in a more complex environment. #### **The House-Unit Price Gap** After years of underperformance relative to detached houses, conditions in the unit market have shifted, though the picture is more nuanced than headlines suggest. Capital city house values rose roughly three times as much as unit values following the COVID pandemic. That gap is one of the widest on record, and while it is starting to narrow, it remains substantial. | **City** | **House** | **Unit** | **Gap** | | --- | --- | --- | --- | | Sydney | $1.83m | $794,000 | $1.04m | | Melbourne | $1.02m | $605,000 | $415,000 | | Brisbane | $925,000 | $652,000 | $273,000 | | Adelaide | $980,000 | $635,000 | $345,000 | *Sources: ABS transfer prices (Q4 2024) Cotality/CoreLogic, KPMG.* #### **Unit Market Growth** In 2025, around 76% of Brisbane unit markets matched or outpaced house price growth. Perth recorded similar results at 75%, and over 70% of Sydney apartment markets kept pace with houses. Nationally, close to two-thirds of unit markets recorded stronger relative growth, marking a meaningful shift from the pattern of the previous three years. #### **Rental Market Conditions** Unit rents are rising faster than house rents across capital cities and regional areas. Rental demand remains a key driver for unit values, and vacancy rates are well below long-run averages, which attracts investors seeking strong property returns. For investors, the income proposition has improved, though gross yields in Sydney and Melbourne remain modest relative to carrying costs at current interest rates. | National Vacancy Rate (Mar 2026) |  1.0% (2.5% decade avg) | | --- | --- | | Balanced Market threshold  |  4.0-5.0% | | National Gross Rental Yield (Mar 2026)  |  3.57% | | Darwin Gross Yield  |  6.0% | | Sydney Gross Yield  |  3.1% | *Sources: SQM Research, Cotality.* CBRE's March 2026 Outlook projects median apartment rents across capital cities will increase by roughly 24–27% between 2025 and 2030. It is expected that capital city vacancy rates will tighten to 1.1% by 2030. ![Australia unit property investment](https://blog.mcpfinancial.com.au/hs-fs/hubfs/Units%20ss_2757698357.jpg?width=738&height=492&name=Units%20ss_2757698357.jpg) #### **Housing Supply: The Numbers** Supply continues to favour existing property holders, but it's important to distinguish between the headline shortfall and the apartment-specific picture. The [National Housing Accord](https://treasury.gov.au/policy-topics/housing/accord) aims to build 1.2 million new, well-located homes over five years from 1 July 2024 to June 2029. Current figures show the reality is lagging. |  Shortfall (first 15 months)   |  81,000 homes (27% below target)  | | --- | --- | |  UDIA projected deficit by 2030  |  ~380,000 homes  | |  Annual apartment requirement (CBRE)   Expected annual apartment delivery   |  ~75,000    ~60,000  | |  Multi-unit completions (2025 vs 2024)  |  Down 24%  | |  Multi-unit completions vs 2017 peak  |  Down 42%  | |  Apartment approvals (Jan 2026 MoM)  |  Down 24.5%  | * Sources: ABS, UDIA State of the Land 2026, CBRE Apartment Outlook March 2026.* Many structural constraints are at play here, including: - - Construction costs are up by roughly 40% since 2020 - Development finance of 6.5–7.5% (up from ~3.5%) - Skilled labour shortage - Planning Approvals adding 12–36 months These factors suppress new supply, which in turn supports value for established stock in under-supplied locations. #### **Demand Factors Worth Watching** Several scenarios are contributing to unit demand in 2026. 1. Affordability constraints [After two consecutive rate rises in early 2026](https://blog.mcpfinancial.com.au/mcp-market-watch-march-2026-0), borrowing capacity has contracted materially, and more buyers are seeking apartments as a realistic option. 2. Population growth Net overseas migration remains elevated, and an additional 4.4 million people are expected to increase the population towards 2040. The headcount will be more concentrated in established urban areas, where apartments dominate. 3. Investor re-engagement Investors account for around 41% of home lending nationally. As noted above, tight vacancies and rising rents are drawing capital back into the unit segment. 4. Hybrid work patterns Flexible working arrangements support demand for inner and middle-ring apartments near transport and amenities. 5. Government policy settings Build-to-rent tax concessions, the expanded First Home Guarantee scheme, and planning reforms in NSW, Vic, and Qld are directed towards higher-density housing. #### **![Apartment Property Investment Australia](https://blog.mcpfinancial.com.au/hs-fs/hubfs/Apartment%20ss_2735960677.jpg?width=728&height=483&name=Apartment%20ss_2735960677.jpg)** #### **Unit & Apartments Risks and Headwinds** Several factors could weigh on unit values or dampen the outlook. 1. Further rate rises Economists are backing a cash rate rise above 4.35% in 2026. Higher rates directly reduce borrowing capacity and can soften demand at the entry level of the apartment market. 2. Strata and building quality concerns High-profile building defects have made buyers and lenders cautious about certain apartment types, with repairs, compliance, and strata levies eroding returns. 3. Oversupply in specific corridors Pockets such as parts of inner Melbourne, Parramatta, and South Brisbane have seen concentrated apartment growth, which can cause softer valuations and longer selling periods in these areas, even in a tight market. 4. Regulatory intervention [APRA's introduction of a 20% limit on high debt-to-income ratio](https://blog.mcpfinancial.com.au/key-banking-trends-for-advisors) lending signals a more interventionist stance. Further macroprudential tightening, such as [investor lending](https://www.mcpfinancial.com.au/client-services/commercial-finance) limits or tighter serviceability buffers, could slow demand. 5. Global and geopolitical uncertainty Weaker consumer confidence, higher unemployment, or a sharper economic slowdown will impact the property market, including units. 6. Migration policy changes Further tightening of migration policies could reduce rental demand for inner-city apartments and weaken current forecast assumptions. 7. Valuation and settlement risk (off-the-plan) Buyers who purchase off-the-plan at lower rates may struggle to secure settlement finance at higher rates, causing price adjustments in newly built apartments. #### **Financing Units: Practical Considerations** Lender appetite for unit finance remains solid overall for buyers and investors, but selectivity matters. There are a few practical factors to keep in mind when seeking finance. - Property size Units under 50 square metres can trigger lending restrictions. Be mindful of the internal living area measurements before applying for finance. - Location exposure Lenders assess postcode concentration, particularly in high-density corridors. Locations with oversupply may attract tighter loan-to-value ratios or a limited choice of lenders. - Development scale Smaller boutique complexes tend to be favoured by lenders for lower strata risk, a higher proportion of land value, and better long-term growth prospects. Larger towers can face valuation headwinds. - New vs Established Established apartments with a track record of comparable sales often present a cleaner lending proposition than off-the-plan purchases, where settlement risk and valuation uncertainty are real issues in the current rate environment. - Non-bank options The [non-bank lending market](https://blog.mcpfinancial.com.au/demo/choosing-a-banking-provider) is a competitive alternative for unit purchasers, offering flexible servicing models and higher-LVR products for well-qualified borrowers. ![apartments and units lending tips](https://blog.mcpfinancial.com.au/hs-fs/hubfs/unit%20lending%20ss2697398325.jpg?width=738&height=492&name=unit%20lending%20ss2697398325.jpg) #### **Specifics are Key** The unit market in 2026 is in a very different position than it was in 2022. The house-unit price gap is narrowing in most cities, structural under-supply is deeper, rental demand is acute, and affordability constraints are pushing more buyers towards apartments. The fundamentals are supportive, but careful selection, consideration of risks, and [sound financing remain essential](https://www.mcpfinancial.com.au/client-services/mortgage-finance). As with any property decision, the specifics matter: location, building quality, strata health, and financing structure are key influences of a successful outcome. #### **[Contact MCP](https://www.mcpfinancial.com.au/contact) 1300 510 816 or your Finance Partner **[**enquiry@mcpfinancial.com.au**](mailto:enquiry@mcpfinancial.com.au) Follow us on [LinkedIn](https://www.linkedin.com/company/16820) *The team at MCP Financial Services has specialised expertise in structuring complex debt arrangements. We can assist with review and restructuring, refinancing and renegotiating.*     ## RELATED ARTICLES ### [Financing for Unit Developments](https://blog.mcpfinancial.com.au/how-to-obtain-financing-for-unit-development) Units & Apartments are a critical part of the housing and investment property landscape.In recent... [READ MORE >](https://blog.mcpfinancial.com.au/how-to-obtain-financing-for-unit-development) ### [Updated First Home Buyer Scheme 2025](https://blog.mcpfinancial.com.au/updated-first-home-buyer-scheme-2025) First Home Buyer Guarantee - Updated The Federal Government has just announced significant changes... [READ MORE >](https://blog.mcpfinancial.com.au/updated-first-home-buyer-scheme-2025) ### [Unit & Apartment Investment Trends](https://blog.mcpfinancial.com.au/unit-apartment-investment-trends-2024) Explore the latest unit and apartment rental and investment trends for 2024, including Victoria's... 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