Any type of property has the potential to meet your requirements – you just need to identify what those are. You might be hoping to purchase a property, live in it and hang onto it later as an investment. Or you might be looking for your forever home.
Your decision should be based on a property’s individual merits and how it meets your budget and needs. Factors to weigh up when deciding whether a property is right for you include the following.
- Cost of buying in. As apartments are often cheaper to purchase than houses, it can simply be a matter of budget dictating an apartment rather than a house.
- Government rebates. From time to time governments give out incentives to buy new property. Due to a shortage of land and a public policy preference for higher density developments, these incentives often lead to a surge of new apartments and townhouses being built, which encourages buyers to look at these types of dwellings. In most Australian capital cities, this means there tends to be fewer newly-built stand-alone houses available; and those that are built are often either comparatively expensive if they are closer to the CBD or are further afield and may not be as close to the amenities such as shops and transport.
- Running costs. Each style of housing has running costs. In apartments, owners must pay body corporate fees. In some cases – such as when large repair works are needed ─ owners may also have to contribute to a sinking fund (a fund that is set up by the owners’ corporation to cover future capital expenses, such as painting the building, refurbishing driveways or replacing common property including carpets, rooves and gutters). Or owners may have to pay a special levy to cover an unexpected cost, which can sometimes be substantial. Apartments with more bells and whistles – such as swimming pools, lifts and a gym – will often have higher body corporate fees than those in simpler developments such as older blocks of apartments that only have stairs and very few shared amenities. As running costs can vary widely between different apartments, buyers should understand what they are before purchasing. In houses, there are also running costs, including, of course, the property itself and the garden. Bigger properties tend to use more electricity, gas and water, too.
- Living intentions. Would you like to be able to live in your property for a long time if needed? This can influence whether you buy a house or an apartment. If you are intending to start a family in a few years, it is worth considering whether the property would still meet your needs. Keep in mind that it doesn’t always make financial sense to buy property for the short term, particularly with the fees and taxes involved in buying and selling.
- Prospects of capital growth. Buying a property is often the biggest investment many people will make and some home owners have been able to enjoy strong price gains over time. In some areas, one housing type may be primed to gain in value faster than the other. In cities scarcity of land can lead to house prices growing faster than units. However, other demographic factors, such as a trend for living in apartments and a growth in the number of downsizers looking for a lock-up-and-leave lifestyle can benefit apartments. Please keep in mind past performance is not an indicator of future performance.
- Location. You’ll want to choose an area that best meets your needs. Is it near transport if you need that? If you have or are planning children, is it near services for them? What about other facilities such as shopping centres, entertainment areas and job hubs. In some areas, this may mean that an apartment is a more likely option.
When you’re looking for a property you shouldn’t feel constrained to only consider apartments, or, on the flipside, only look at houses. Taking each property on its merits and doing your research about the suburb or town and the property itself will help you to make an informed decision.