Brisbane tipped to overtake Sydney as Australia's priciest unit market: what it means for first home buyers

A new Domain forecast tips Brisbane to overtake Sydney as Australia's most expensive unit market during the 2027 financial year, a shift that would have looked unthinkable a few years ago. For first home buyers who have been steered toward units as the more affordable entry point, the numbers behind this forecast say a lot about where genuine affordability is heading, and where a new risk is quietly building.

Why Brisbane units are catching up to Sydney

Domain's forecast has Brisbane's median unit value climbing as much as 9% over the coming financial year, while Sydney's unit median is tipped to slip by roughly $25,000. The result is that Brisbane and Sydney unit medians are forecast to sit within a similar band, a gap that has been narrowing for some time as Sydney's traditional price premium fades.

Domain also tracks a house-to-unit price premium, the gap between what a typical house costs versus a typical unit in the same city. That premium has been sitting at a record level in Sydney, above 110%, and it is now compressing as affordability pressure pushes more buyers toward units simply because houses have moved out of reach for a growing share of household incomes.

The scheme dynamic first home buyers should understand

Part of what is driving demand into units, particularly in Sydney, is that government-backed low deposit schemes use fixed property price caps. As house prices in premium and middle suburbs sit above those caps, units priced underneath them become one of the few realistic paths left for a first home buyer wanting to use a scheme with a smaller deposit.

That is a reasonable strategy on paper, but it concentrates buyer demand into a narrower slice of the market at the same time as borrowing power has been squeezed by higher interest rates. More buyers chasing a smaller pool of scheme-eligible units can push those specific prices up even while the broader market is soft, which is exactly the pattern behind Brisbane's climb and Sydney's unit resilience relative to houses.

What this means for first home buyers

Domain's chief economist has flagged the risk directly: buying with a thin deposit into a market where further price falls are possible can leave a buyer with little or no equity soon after settlement. That risk sits underneath the "units are more affordable" narrative and deserves just as much attention as the entry price itself.

• Do not choose a unit over a house purely because it fits under a scheme price cap. Weigh the long-term growth pattern of units in your target suburb against your actual budget and goals.
• Buying with a small deposit means a small equity buffer. Work out how much a price fall of even a few percentage points would do to your equity position before you commit.
• Check whether the specific suburbs you are considering are the ones driving the Brisbane or Sydney trend, since national and city-wide averages can hide very different outcomes street by street.
• A mortgage broker or buyer's agent can help you compare a unit purchase under a low deposit scheme against a traditional deposit on a smaller house, since the right answer depends on your income, savings timeline and risk tolerance rather than a national headline.

Run the numbers

Before deciding between a unit and a house, or between buying now and waiting, use these tools to see how the numbers actually stack up for your situation:

• Scheme Comparison Tool - see which low deposit schemes you may be eligible for and how their price caps apply to units versus houses in your area
• Borrowing Power Calculator - check how much you could borrow today under current rates and lending buffers
• True Cost Calculator - compare the full ownership cost of a unit against a house once fees, levies and maintenance are included