Australian Housing Units 2025: Trends, Policies & Market Insights

Australian housing units—apartments, townhouses, and villas—are under the spotlight in 2025. With continued urbanisation, policy reforms, and shifting buyer preferences, understanding the dynamics of this property segment has never been more crucial. Whether you’re a first-time buyer, a seasoned investor, or a renter navigating a competitive market, this year brings notable changes to the way we think about housing units.

The 2025 Landscape: What’s New in Housing Units?

Australia’s housing market is experiencing a unique set of forces in 2025. After a decade of steady unit construction, policy makers are responding to affordability pressures and supply shortages, particularly in major cities like Sydney, Melbourne, and Brisbane.

• Policy updates: The National Housing Accord, updated for 2025, commits to accelerating the construction of 1.2 million new homes by 2029, with a particular focus on medium- and high-density housing units.

• Stamp duty reforms: Several states, including NSW and Victoria, have expanded their stamp duty concessions for first-home buyers purchasing units under $900,000, making entry into the unit market more accessible.

• Rental market shifts: With rents rising by up to 10% in some city centres, units have become an increasingly attractive option for both renters and investors seeking yield and stability.

These changes are shaping not only how housing units are built and sold, but also who is buying them and why.

Who’s Buying, Who’s Renting: Demographics and Demand in 2025

The demand for housing units is being driven by a diverse mix of Australians:

• Young professionals continue to favour apartments in inner-city precincts, valuing proximity to work and lifestyle amenities.

• Downsizers—often empty nesters—are swapping large family homes for low-maintenance units, especially in lifestyle-rich suburbs and coastal towns.

• Investors are returning to the unit market, buoyed by government incentives and consistently high rental demand in urban centres.

According to CoreLogic’s 2025 market report, unit prices grew by 4.2% nationally in the year to May, with the strongest gains in Brisbane and Perth. Meanwhile, rental yields on units in Sydney and Melbourne now average 4.5%, outpacing those of detached houses in several suburbs.

Affordability, Supply, and the Future of Units

Affordability remains a defining issue in the unit market. Despite price increases, units are still a more accessible entry point for many buyers compared to standalone houses. The 2025 federal budget includes $3.2 billion earmarked for social and affordable housing, with a significant portion allocated to new unit developments in high-growth corridors.

Supply challenges do persist, however. Industry data shows that while approvals for new apartments have risen 8% since 2024, construction industry bottlenecks—labour shortages and rising material costs—are delaying project completions.

• Build-to-rent schemes are gaining momentum, with institutional investors partnering with state governments to deliver long-term rental units with capped rent increases and secure leases.

• Sustainability is a growing focus, with new units required to meet stricter energy efficiency standards under the updated National Construction Code.

For buyers, this means more choice in the medium term, but also the need for careful due diligence on development quality and financial viability.

What to Watch: Key Trends for 2025 and Beyond

• Government incentives: Keep an eye on evolving grant programs and stamp duty relief measures, particularly for first-home buyers and those purchasing off-the-plan units.

• Location matters: Units near public transport, employment hubs, and lifestyle precincts remain in highest demand—and are more resilient in market downturns.

• Technology and lifestyle: Smart home features, communal workspaces, and wellness amenities are increasingly standard in new unit developments.

As the Australian dream adapts, housing units are set to play a central role in our urban future.