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Mike Bentley Apartment Buyers Agent
Citylife International Realty
Representing Melbourne Apartment Buyers
HOUSES FOR INVESTMENT, NOT APARTMENTS
That's the 40-year-old myth. New data may suggest otherwise.
Revealing new figures from SQM Reseach is challenging one of Australia's longest held property conventions.
And what this data reveals is surprising virtually everyone
While history shows that capital growth is the most important factor in determining the long-term performance of an investment property, because of new tax laws introduced in mid 2026, certain types of properties in selected areas are now out-performing all other types of properties.
Since I first started my Australian real estate career nearly 40 years ago, the same debate has always raged:
“Which is the better investment, houses or apartments?”
And the consensus amongst most, and supported by the data, is that houses over the long term have shown significantly higher capital growth (on average) than apartments in Australia.
But there is a now a move to more lower priced properties, not only because of affordability constraints pushing the price of a house in most of Australia’s capital cities beyond the reach of the average buyer, but, two other events have occured that may create a perfect storm for buying an apartment in the next 12 months.
- Interest rate rises. As interest rates go up, buyer borrowing recedes, forcing them into lower priced properties.
- Tax changes. The abolition of negative gearing in mid 2026 changes the way investors will buy property: they have to look for higher yields to cover the fact they can no longer claim tax losses against their personal income.
The higher interest rates, combined with tax changes mentioned means many investors have no choice but to turn to lower priced, and high yielding properties.
As house prices rise in most cities, investors and owner - occupiers both turn to apartments. Sometime not through choice, but through simple necessity.
With supply of apartments lagging population and migration growth, expect this trend to continue
HERE IS NEW DATA FROM SQM RESEARCH THAT SHOWS THAT APARTMENTS CAN OUT-PERFORM HOUSES.
CONCLUSION
Melbourne apartments may have started to recover after a long decade of limited growth.
While many apartments will not enjoy the coming upturn, others will out perform and even see similar growth as seen in Brisbane, Perth and Adelaide over the past 7 years.
SUMMARY AS AT JULY 14, 2026
PAST 12 MONTHS
In every single one of Australia's 5 major capital cities over the past 12 months, apartments have outperformed houses in capital growth.
Brisbane, Perth and Adelaide have all seen remarkable apartment growth, outperforming houses.
Sydney has has been a noticeable underperformer in which can mostly be explained by it's high base cost.
The Melbourne apartment result has surprised everyone. However, it seems clear that apartments in Melbourne are greatly undervalued.
LONGER TERM : PAST 7 YEARS
TO 14 JULY, 2026
The long-term winners have been apartments in Brisbane and Perth.
- Houses in Brisbane, Perth and Adelaide have performed extremely well.
Apartments in Adelaide have also performed very well.
Sydney and Melbourne have underperformed greatly for both houses and apartments over the past 7 years.
About Mike Bentley
My first property was a tiny 20 square metre studio unit in Sydney's Kings Cross.
Since then I've invested in - and actually lived in myself - apartments across five cities from small studios to a 250 square metre luxury apartment — and have also owned houses in suburbs like Ivanhoe in Melbourne and Nedlands in Perth.
So I fully understand the difference when investing or living in apartments or houses — not just theory or from data — but from decades of real life experience on both sides.
After more than 30 years specialising in apartments, I believe there are very few people in Australia with a deeper, practical understanding of what makes an apartment truly perform.
My experience and knowledge is now available to every Melbourne apartment buyer at the perfect time in the cycle, whether it is a one bedroom inner-city pied-a-terre, or a family sized three bedroom apartment, or a two bedroom investment apartment.
Helping Families And Clients Buy Apartments And Purchase Investment Units In Melbourne
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Whether you’re just starting your search or ready to make an offer, let’s have a quick, no obligation chat about your goals and whether I can help.
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