Australia’s apartment market is gaining ground as affordability pressures and shifting buyer preferences combine with expanded government support.
New research by Nuestar and Hotspotting shows apartments accounted for 42 per cent of all property transactions nationally in the year to August 2025, with 163,246 sales recorded. The release of the expanded First Home Guarantee Scheme on 1 October is expected to accelerate that momentum.
Nuestar Founder and Director of Property Michael Wilkins said the scheme is set to open doors for thousands of homebuyers. “The impact will be both immediate and far-reaching with the combination of increased borrowing capacity and reduced upfront costs set to supercharge demand in the apartment sector,” Mr Wilkins said.
He said pent-up demand and improved affordability were likely to put upward pressure on prices in areas where supply is tight. But he urged caution. “Homebuyers and investors must ensure they are working with credible developers with proven track records and relevant accreditations. For example, the Independent Construction Industry Rating Tool (iCIRT) and Latent Defects Insurance (LDI) give homebuyers, especially in New South Wales, greater confidence by independently verifying the credibility of developers and guaranteeing protection against serious building defects,” he said.
The research points to strong buyer interest across major metropolitan and coastal markets, with Sydney’s western corridor and lifestyle hubs such as the Gold Coast, Gosford, Newcastle and Wollongong seeing heightened activity. “This isn’t just a capital city story because it’s playing out in lifestyle and regional hubs like the Gold Coast, Gosford, Newcastle and Wollongong as well,” Mr Wilkins said. “It’s vital that buyers always prioritise location, and not just affordability, to ensure solid capital growth over the medium- to long-term.”
Sydney’s apartment sales climbed from 48 to 51 per cent of total transactions over the past two quarters, with Melbourne’s market share rising from 34 to 37 per cent in six months. Melbourne also recorded its strongest quarter since the 2021 boom. Brisbane has seen similar momentum, with apartments now representing 42 per cent of sales. “Suburbs such as Fortitude Valley, Indooroopilly and Windsor are leading the charge, driven by proximity to transport, education and lifestyle precincts,” Mr Wilkins said.
Hotspotting Director Terry Ryder said the trend reflected deeper shifts in the market. “Affordability is the key driver because in many of these markets, apartments are the only viable option for buyers priced out of the housing sector, which is why we’re seeing such strong uptake in places like Brisbane and Canberra,” Mr Ryder said.
On the Gold Coast, apartment sales increased from 47 to 51 per cent of the overall market. Canberra’s share lifted from 31 to 40 per cent, while Darwin saw an increase from 31 to 36 per cent. Mr Ryder said the data showed apartments were gaining new standing. “They’re becoming the strategic choice for buyers who want location, lifestyle and long-term value,” he said.
The report also found that in Greater Sydney, 53.24 per cent of apartment sales in the second quarter of this year were to first home buyers, up from 51.66 per cent in the previous quarter. Mr Wilkins said the trend underlined the growing appeal of apartments as a pathway into ownership. “With developers increasingly focused on build-to-rent models and construction costs remaining high, new supply is limited,” he said. “Combined with higher gross yields and government support, this supply-demand imbalance is expected to intensify competition and drive further price growth in the unit sector.”
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