Melbourne suburbs where units save buyers over $1m
Homebuyers can save more than $1m to secure a home in some of Melbourne's most exclusive suburbs if they're willing to give up a backyard.
A growing number of buyers are ditching the dream of buying a house to stay in the postcodes they love, with new data revealing just how wide the gap between units and houses has become in these hot spots.
New Ray White analysis shows units remain relatively affordable in several of Melbourne's most expensive suburbs, with house to unit median price gaps up to $1.1m in areas such as Hawthorn and Brighton.
OpenCorp chief executive Cam McLellan said buyers were becoming more strategic, particularly in high-demand suburbs such as Richmond, East Melbourne and St Kilda East.
'In suburbs like Richmond, Hawthorn and St Kilda East, buyers can save more than $1m by choosing a unit over a house,' Mr McLellan said.
'Stretching for a house only makes sense if it doesn't lead to mortgage stress or missing out on better long-term growth.'
But while many buyers were choosing rentvesting as a property strategy and buying a house in an outer suburb while enjoying their inner city lifestyle, they could be better off in the long term purchasing a quality unit, Mr McLellan said.
'Rentvesting gives people lifestyle now and financial security later,' he said.
'It's not about the product, it's about whether the numbers stack up.
'We run detailed cashflow and growth modelling because a quality unit in a proven suburb often outperforms a low-grade house on the fringe.'
Ni Advocacy director and buyers' advocate Kevin Ni said the rise in unit interest wasn't just driven by price, it was also about value and livability, especially in older-style buildings.
'We're seeing people avoid the off-the-plan high-rises and instead go for character-filled, boutique blocks with more space and better capital growth,' Mr Ni said.
'Those older-style two-bed units often have bigger living areas, thicker walls, and a stronger owner-occupier presence — which can really help long-term value.'
Suburbs like Elwood, Malvern East, Hawthorn, Kew, and Armadale are among those older apartments in low-rise blocks, which can be larger, more open, are in demand, he said.
Mr Ni said the house-versus-unit trade-off had become more pronounced in recent years, particularly for young couples determined to live near the city.
'They're prepared to compromise on space to get into locations like Richmond or Hawthorn,' he said.
'For $750,000, you can still buy a two-bedroom apartment in a boutique block near cafes, parks and transport, and buyers are prioritising that.'
The Ni Advocacy director said many buyers were now actively avoiding high-rise developments, instead focusing on older-style or boutique blocks with better layouts, more space and long-term value.
'Buyers are far more educated now – they're looking for scarcity and liveability, not cookie-cutter apartments in oversupplied towers,' Mr Ni said.
In growth areas such as Doveton, Melton and Hampton Park East, where the house-unit price gap is under $120,000, Mr Ni said some were opting to stretch their budget to secure a house, often with help from parents.
'We've seen people spend six months stuck in limbo because they wouldn't budge on their dream suburb,' he said.
'The advice is be realistic and flexible. Compromise is part of the process now.'
Ray White chief economist Nerida Conisbee said the appeal of units was only set to grow, particularly as houses in blue-chip postcodes remained out of reach especially for first-home buyers.
'People have been priced out of houses in suburbs like Hawthorn for a long time, but units remain accessible,' Ms Conisbee said.
'It's a trade-off: do I want a big backyard, or am I happy with a smaller home in a better location?'
Ms Conisbee said Australia was undergoing a slow cultural shift, from suburban sprawl to inner-city density, but was still coming to terms with the change.
'We still love the idea of having a big house and a lot of land,' she said.
'The reality is household sizes are shrinking and it's much cheaper from an infrastructure perspective to increase density.
'That means more people will need to embrace apartment living, especially if they want to stay in high-demand suburbs.'
Ms Conisbee said rising construction costs was helping to improve values for quality units.
'It's becoming harder and more expensive to build new apartments, which is why quality units in desirable locations are actually holding their value, or even outperforming.'
Top 10 Melbourne suburbs with the largest house to unit price gaps:
Suburb Median House Price Median Unit Price Price Gap
Toorak $3,994,669 $1,049,771 $2,944,898
East Melbourne $3,203,726 $875,926 $2,327,800
South Yarra $3,060,336 $833,997 $2,226,339
Brighton $3,123,574 $1,194,140 $1,929,434
Hawthorn $2,488,921 $565,103 $1,923,818
Armadale $2,639,241 $737,493 $1,901,748
Malvern $2,609,420 $726,665 $1,882,755
Kew $2,806,515 $928,098 $1,878,417
Camberwell $2,716,661 $1,005,789 $1,710,872
Albert Park $2,651,151 $961,470 $1,689,681
Source: Ray White
Top 10 Melbourne suburbs with the smallest house to unit price gaps:
Suburb House Price ($) Unit Price ($) Gap ($)
Doveton $574,931 $486,204 $88,727
Melton $523,513 $427,548 $95,965
Melton South $527,685 $427,391 $100,294
Brookfield $564,721 $452,631 $112,090
Kurunjang $556,402 $443,254 $113,148
Hampton Park $622,315 $496,640 $125,675
Sunshine North $704,905 $576,338 $128,567
St Albans $685,020 $551,191 $133,829
Wyndham Vale $639,501 $501,095 $138,406
Harkness $598,723 $454,703 $144,020
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