Industry forecasts suggest apartments may perform strongly in 2026, though outcomes will depend on economic and market conditions.
The price growth race heats up
Apartment prices across Australia’s major capitals are forecast to surge between 5% and 6% in 2026, with the strongest prospects in Sydney, Perth and Brisbane.
For newly built apartments, industry research predicts a bumper rise of over 20% by the end of 2026 as construction lags population growth and interest rates ease.
For example, Sydney’s median unit price is set to reach $889,000 – a 6% lift – while newer apartments are commanding large premiums over older stock, with some three bedroom units now fetching 45% more than their established counterparts.
What’s driving this?
The answer comes down to the familiar refrain:
- persistent undersupply
- record high construction costs
- growing demand from both owner occupiers and investors seeking better affordability and strong rental returns.
Future supply is forecast at 50,000 units annually through to 2029, well short of what’s needed to house Australia’s growing population.
LIVEABILITY REALITIES
More than just four walls
Long gone are the days when apartments were just a stepping stone or the ‘lesser’ option.
Today’s buyers, especially downsizers, young professionals and families, are prioritising quality design, prime locations and amenities such as rooftop terraces, gyms or even coworking spaces.
Developers are responding with family friendly apartments in inner and middle ring suburbs and flexible layouts that fit modern lifestyles.
Units close to transport, top schools and lifestyle precincts offer the kind of walkable and connected living increasingly in demand, especially as flexible work arrangements mean more time at home and less tolerance for long commutes.
For some buyers, apartments may provide a practical and potentially resilient option.
Affordability and the investor angle
With the median house price now at stretching point for many budgets, units provide a real, attainable entry into prized postcodes.
The gap between house and apartment prices remains wide, yet in 2026 it’s predicted to narrow as more buyers chase value and as renters flood the market.
You may find that your inner city apartments could in fact cost more than stand alone houses. So keep posted on prices for both houses and apartments.
Rents are set to rise by over 25% in major capitals with vacancy rates forecast to drop to an ultra tight 1.2% by 2029.
That’s good news for investors looking for robust yields and a future capital growth kicker – provided they focuson sought after well located stock and steer clear of oversupplied towers.
Not just a backup plan
If units have ever felt like the ‘consolation prize’, 2026 is shaping up to be the year they flip the script. Surging prices for quality apartments, rental growth and a huge shift in how Australians want to live will drive this strategy.
With the right research and a clear focus on liveability, a well chosen unit could be the property hero of the next growth cycle – and a much smarter buy than the share house in your twenties.