The gap between house and unit prices has reached an all-time high in Australia, as the cost of buying a property grew by its fastest pace in 33 years.
CoreLogic's monthly market update has revealed unit prices rose by 14.3 per cent in the 12 months to January 2022, while house prices increased by 24.8 per cent over that period.
When combined, the two figures represent Australia's highest annual dwelling growth rate since 1989.
However, the disparity between house and unit values reached a record high of 28.3 per cent in January.
National house prices increased by 1.3 per cent over that month, up from 1.2 per cent in December, while unit values slowed from 0.4 per cent to 0.3 per cent.
Report author Kaytlin Ezzy said the performance gap between houses and units was in part due to COVID-related shocks disproportionately affecting unit demand.
"The annual performance gap between houses and units began to narrow in the final three months of last year, in part due to the lifting of lockdowns and border restrictions as well as increasing affordability constraints diverting demand towards the medium to high-density sector," she said.
"However, in January we saw that annual performance gap start to widen again, which could, in part, be explained by the disparity between advertised house and unit supply.
"Shortages in advertised listings throughout COVID has helped fuel value growth by creating a sense of urgency among buyers."
The median value for a unit in Australia is $606,584, with the highest prices in Sydney at $837,640, Melbourne at $624,158 and Canberra at $594,992.
Total advertised unit supply in Australia's combined capital cities over January declined by 3.7 per cent, compared to the same time last year, and fell 7.8 per cent below the previous five-year average.
Over the same period, capital city house listings declined by 12.5 per cent compared to this time last year, and fell 32.7 per cent below the five-year average.
Ms Ezzy said despite rising inflation, the prospect of a rate hike in late-2022, affordability constraints and tighter lending restrictions, Australia's unit market could benefit from some tailwinds in 2022.
"It is likely affordability constraints will gradually pull some demand away from houses towards more affordable units and with international borders opening this month, Australia may gradually see a return to pre-COVID levels of migration," she said.
"As most migrants initially rent in Sydney or Melbourne this could help bolster rental demand in those markets hardest hit by the pandemic, which, in turn, could boost investor demand and ultimately, unit prices."
Unit rents recorded a higher monthly growth rate than houses in January, up by 1 per cent and 0.7 per cent respectively.
Melbourne unit rents grew the fastest, rising by 1.4 per cent in January, followed by Sydney at 1.1 per cent.
CORELOGIC UNIT VALUE INDEX FOR JANUARY 2022
Sydney - up 0.1 per cent, up 15.4 per cent
Melbourne - down 0.4 per cent, up 8.1 per cent
Brisbane - up 1.4 per cent, up 9.5 per cent
Adelaide - up 1.5 per cent, up 13.8 per cent
Perth - 0 per cent, up 9.6 per cent
Hobart - up 0.4 per cent, up 32.8 per cent
Darwin - up 1.3 per cent, up 29.9 per cent
Canberra - up 1.3 per cent, up 23 per cent.
Australian Associated Press
Sign up for our newsletter to stay up to date.