As house values rise and unit prices fall, the great Australian dream of owning your own home is being redefined as medium or high density apartment living.
A roomy house with a garden big enough for backyard cricket might be the stereotypical dream home but for many people around Australia, medium and high-density apartment living is the new reality.
House price growth will outstrip units in most cities over the next three years, as a glut of apartments softens demand and improves unit affordability, QBE's Housing Outlook 2017-2020 report forecasts.
QBE Lenders' Mortgage Insurance chief executive Phil White said units now account for almost half of all residential construction in Australia and over two thirds of residential construction in Sydney.
He said affordability will improve in most capital cities largely due to cheaper apartments.
"The Aussie dream of home ownership is certainly being redefined from one that is that quarter-acre block with the pool and the Hills Hoist to one that is much more about living closer to the cities in medium-to-high-density apartments," he said.
The NSW and Victorian state governments recently dumped stamp duty for first home buyers on properties valued up to $650,000 and $600,000 respectively.
"That really is putting (first home buyers) again back into that unit market rather than the housing space," Mr White said.
Houses will get more expensive in every capital city except Sydney and Darwin over the next three years, with Canberra, Hobart and Melbourne the growth hot spots, according to the report.
Apartment prices are forecast to fall by seven per cent in Brisbane, five per cent in Melbourne and four per cent in Sydney, largely due to tighter investor lending restrictions.
Hobart will remain the most affordable capital city to live in, and as the economy strengthens it is a popular option for people wanting a tree change, Mr White said.