Urban lifestyles are taking off as single dwellings become prohibitively expensive.

RP Data's newest Property Pulse has shown a surge in the popularity of high density living. Analyst Cameron Kusher said units have outperformed houses in both value and sales volumes.

Capital city unit sales accounted for 33.5% of all sales, up from 28.2% if sales 15 years ago. The proportion was even higher in Sydney and Melbourne, where unit sales accounted for 42.8% and 33.8%, respectively. Kusher pointed out that unit values had also performed strongly.

“One important point worth mentioning is that over the 12 months to September 2011, the change in capital city unit values (-1.1%) has outperformed that of capital city houses (-4.1%) – a trend that has been replicated over the past five years with house values increasing at an average annual rate of 4.8% and unit values increasing by a greater 5.9% for the same period," he said.

Kusher said the trend toward units coincided with dwindling affordability, with demand for high density living set to grow.

"Melbourne in particular has done a much better job at providing new higher density housing over recent years than we have seen in the other major capitals. Should other cities follow this lead, a greater supply will likely lead to improvements in housing affordability with developers having to offer competitive pricing to secure sales," he said.