Should you buy an apartment or a house?
When buying property and securing a home loan whether to buy an apartment or a house should be one of the first decisions you make. For some, the answer will be clear straight away, but for many the right choice will be a complete mystery.
There’s several benefits to both types of home and neither option provides a one-size-fits-all solution. When deciding you’ll have to take into account what you want from the property, how much space you need, your budget and how much time you have to care for the place (among many other things).
You’ll then have to decipher which style of home best fits your needs – this can be the hardest part! Instead of spending days researching and worrying, read on to discover the pros and cons of buying an apartment and a house.
Median prices for detached homes across our five biggest cities is a staggering $765,730 – over $170,000 more than the median price for units.
The costs
For many, the costs associated with buying a detached house outweigh the benefits. Understandably so, as CoreLogic RP Data shows that the aggregated median price for detached homes across our five biggest cities is a staggering $765,730 – over $170,000 more than the median price for units.
In Sydney and Melbourne the gap is even wider, as in both cities the median value for houses is over $300,000 more than that of apartments. Because of this, when calculating how much you can borrow, and what you can afford units may be the best option.
On the other hand, the winter edition of the NAB Housing Market Report suggests that capital gains could be higher with houses. The report forecasts that across all capital cities house prices will increase 0.5 per cent, while unit prices will fall by almost 2 per cent during the same period.
With this in mind the extra costs involved in buying a detached house might be worthwhile in today’s turbulent market. Units may be cheaper in the short run, but in the future these forecasts reveal that a house could hold its value, making a better investment.
The maintenance
A survey conducted by the Australian Bureau of Statistics (ABS) has revealed that Australian’s spend between 20 and 40 hours doing household tasks. On top of a 40 hour work week, this is a considerable amount of time – time which you will want to minimise as much as possible if you’re busy with work or travel.
In this sense, an apartment is the best option as exterior maintenance of the building, infrastructure repairs, painting and several other things will be covered by your strata fees. In general all you’ll have to worry about is the space inside of your apartment, the dishes and remembering to take out the bins.
In a house it’s quite the opposite, the maintenance of the entire property is only your responsibility. This may include maintaining the lawns, paying professionals to fix the plumbing or wiring and repairing any structural faults that the house may have (among many other things).
On average, new detached houses are just under 250 square metres in Australia.
The space
Our homes are some of the most spacious in the world, in fact, ABS data has revealed that on average, new detached houses are just under 250 square metres in Australia. That’s a lot of space!
‘Other new residential’ (which includes apartments) sits at an average of around 140 square metres – just over half the average size of detached homes.
With this in mind, families may gravitate towards a house, to give the kids a room each and a yard to play in. On the other hand, young first home buyers, travelers or career minded people may prefer the convenience and affordability of an apartment.
Whatever way you go, it’s essential that you get your finances in order before buying. We’ve got decades of experience doing just that, and our services are at no cost to you.
