And according to the REIQ, in the present time of historically low housing affordability, units and townhouses also provide the perfect affordability buffer.

"When you look at the median unit and townhouse prices there are some very affordable properties still available which would suit first home buyers, couples or small families.

"And in a lot of cases, units and townhouses are located in areas that are closer to all mod cons and an easier commute to the city," REIQ chairman Peter McGrath said.

"Units and townhouses really do provide the perfect buffer for affordability with prices much lower than the traditional house."

Over the December quarter, the number of unit and townhouse sales declined partly due to less investor interest in the market.

The current interest rate environment – as well as rising prices – has prompted many people to take a breather from investing in residential property. However as the year goes on, and yields improve, investors will re-enter the market.

REIQ December quarter unit and townhouse figures also show a slight decrease in prices in some regional areas, which can partly be attributed to varying quality of stock sold over the period.