Houses vs Apartments

Which is the better investment?

Once  upon a time, investing in apartments was  considered inferior to purchasing a house – given  the substantial value growth that ‘house and land’ investment has offered historically. Yet as Australia’s cities  grow  and our population swells, apartments are  now yielding robust returns and creating a level  playing field when it comes to return on investment and capital growth.

A premium apartment in a popular suburb can  offer  an investor strong capital growth – which can  often be more lucrative than that of a house of equal value in an outer-urban location. When deciding which investment type is right for you,it is crucial to consider Australia’s changing demographics. There are  more one and two-person households than there were twenty years ago, creating a higher demand for apartment living with easy access to transport and employment. Young professionals and lively retirees who pay handsomely in order to live close to cities and commercial hubs are  key drivers of apartment value.

That said, owning a family home in the leafy,  comfortable suburbs  boasting
multiple bedrooms and outdoor space – can  also provide substantial growth. Over a longer period of time, statistics show that houses do yield stronger growth than apartments, although apartments often enjoy better results in the short term.

So which to choose? Investment growth depends entirely on consumer demand rather than ‘genre’ of investment. Apartments are  considerably more profitable than they once were – and if you are  planning to purchase in the inner-suburbs, they can  offer  excellent growth. If you are considering buying in outer suburban areas, purchase property that’s in demand: if the key market of purchasers are  families who value space and proximity to schools, houses are  an ideal choice.

Consider too  the quality of the property

whether an apartment or a house. Does  it need substantial work  which you  will need to budget for, or is it a new build with lots of depreciation potential? If part of a body corporate, are  the fees fair and the amenities of value to tenants? Both houses and apartments are  strong investment options; you  simply need to research the market you’re buying into. Critically, you’ll need to understand the rental return you  can  expect from your purchase. We welcome your  call to review your  financial situation prior  to your  next purchase.