- 15 May 2025
- By API Magazine
Three-bedroom apartments are meeting a growing demand from numerous segments of the property buying market, from downsizers to young families and first home buyers, but supply is scarce.
Over the past five years, houses have statistically outperformed units in every capital city across Australia.
As a result, houses are often seen as the safer and superior investment.
But analysing the market across all major cities, I’ve observed an emerging and promising shift: the growing appeal and performance of three-bedroom, family friendly units.
While two-bedroom units remain abundant, the demand for more spacious and practical living has become apparent.
A new segment of buyers is now competing for a limited supply of three-bedroom units, particularly in lifestyle locations and areas close to the coast.
First home buyers who have been priced out of the detached housing market are seeking alternatives that offer room to grow, not just a stepping stone property.
Likewise, downsizers, particularly empty nesters, are selling the family home but still want sufficient space for children, grandchildren or visiting guests.
What I’m seeing, in particular is increasing competition from a diverse pool of buyers, not just apartment hunters, but also those traditionally in the market for villas or townhouses.
Three-bedroom units, especially those designed with families in mind, are becoming a serious consideration. In my valuations, I’ve seen notable demand in coastal suburbs and lifestyle pockets that attract millennials and young families.
These buyers are seeking access to lifestyle, community and amenities without the million-dollar price tag of a freestanding home.
To many of them, proximity to a beach, park or cafe precinct is seen as their backyard. As such I’ve seen a healthy increase in market value.
Too many cookie-cutter apartments
Not just any three-bedroom unit will do. To meet demand and achieve strong market performance, these properties must meet a certain standard.
Family-friendly doesn’t just mean three bedrooms on paper, it means functional design.
Ideally, the configuration includes three genuine bedrooms, two bathrooms, and a double car space. Outdoor space is also crucial a decent sized balcony that can comfortably fit a BBQ and a small table setting. It’s the little details that set a unit apart and make it feel like a home.
The market is telling us what it wants. Yet much of the current high and medium-density development continues to focus on cookie-cutter two-bedroom apartments that flood the market and lack long term desirability.
There is a clear opportunity here for developers to shift gears and meet this growing demand head on.
If we start designing and building more family friendly apartments, not only could we better serve the changing needs of buyers, but we could also contribute to addressing the housing crisis in a meaningful and sustainable way.
For governments and policymakers, the focus should not just be on incentivising buyers to purchase new for the sake of it, but rather on encouraging developers to build the types of homes that people actually want to live in long term.
Family-friendly apartment design is not a niche; it’s a growing segment that represents the real-life demands of modern Australian households.
In the race to solve housing supply and affordability, let’s not just build more. Let’s build better. Three-bedroom, family-friendly units, well designed and well located, might just be a big part of the answer.
Article Q&A
What percentage of new units have three bedrooms?
Three or more bedroom houses make up about 90 per cent of the market for house listings, whereas for units, it is less than 30 per cent.
