Sky‑High Apartments: Sydney and Melbourne Hit Record Highs

Australia’s two largest cities are once again making headlines — this time for soaring apartment prices. With houses increasingly out of reach, apartments have become the main entry point for buyers and investors alike. But now, even that segment is hitting record highs.

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Current Apartment Prices: Sydney vs Melbourne

Sydney

• Median apartment price: ~A$880,000 (Oct 2025)
• Houses now around A$1.55–1.62 million
• Gap between houses and units is at record levels — in some areas, houses cost double what apartments do

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Melbourne

• Median apartment price: ~A$615,000–A$621,000
• Inner-city units: ~A$603,500
• Price growth has been flatter; some inner-city values even dipped slightly

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What's Driving Record Apartment Prices?

• Affordability pressures: Apartments are the more attainable option as house prices surge
• Supply vs demand: Limited land and costly new developments push up prices
• Population growth: Migration and urban living preferences increase demand
• Widening house vs apartment price gap: Especially stark in Sydney — now among the largest gaps in the country
• Interest rates: Lower rates boost borrowing power, though future hikes could reverse momentum

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Key Differences Between Sydney and Melbourne

In Sydney, the median apartment price has reached approximately A$880,000, reflecting strong growth and record highs. The price gap between houses and apartments is now very wide, with houses often costing nearly double. This is driving increased demand from investors, particularly in high-amenity suburbs where rental returns and long-term capital growth are more promising.

In contrast, Melbourne's median apartment price is around A$615,000, and while some areas have seen growth, the overall trend is more mixed—with certain inner-city pockets experiencing price declines. The house-to-apartment price gap is growing here too, but it's less extreme than in Sydney. Investor demand in Melbourne is softer in the CBD due to concerns about oversupply, but stronger in fringe areas where prices are lower and yields more attractive.

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Looking Ahead

• Sydney’s apartment market shows no signs of slowing — demand is strong, and price gaps are driving more buyers into the unit market.
• Melbourne’s outlook is more balanced, with opportunities for value in some areas, but less heat overall.
• Rising prices are good news for owners and investors — but bad news for affordability.

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Apartments are no longer the "cheap" alternative in Australia’s biggest cities — especially in Sydney. While they remain the most accessible option for many, record prices are making even entry-level units harder to afford. The key for buyers and investors: focus on quality, location, and long-term value, and be aware of oversupply or affordability risks if market conditions shift.

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