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Whether it’s your first property, or you’re looking to expand your existing investment portfolio, it’s always important to decide whether to purchase an apartment vs house.
While both have their pros and cons, recent trends in the property market suggest that buying quality brand-new apartments may be the wiser and more beneficial choice.
We’ve put together some key points to consider when it comes to purchasing a property and making the right decision for you.
Affordability of Apartments vs Houses
Affordability is arguably one of the most significant factors when it comes to choosing a property.
As a general rule, apartments are cheaper than houses and are therefore in easier reach financially for most people. Buying an apartment may also allow you to consider a much wider selection of potential suburbs to purchase in.
In June 2021, the median cost of a house in Sydney sat at $1,224,613, while the median apartment price was $794,193 – the largest price gap between the two median prices in Australian history.
This gap will inevitably tighten in the years to come. Many buyers foresee this and are quickly seeking to take advantage of current low interest rates to move closer to work, enjoy a change in location, or even invest in a growing area.
Maintenance Costs of Apartments vs Houses
Both houses as well as apartments require on-going costs for maintenance and repairs.
With a house, you will be solely responsible for the maintenance of the property, which can include gardening, painting, and various repairs. Older homes tend to require more maintenance due to general wear and tear over the years, which should also be accounted for.
Although apartments have strata rates, these fees are set and predictable. Your strata company will also take care of certain maintenance tasks, meaning you save time and effort while being able to rest easy knowing that your property will be maintained to the highest standard.
Housing Shortage
According to projections by the Australian Bureau of Statistics, NSW will need an additional 1.7 million homes by 2061 to accommodate for the forecasted population growth.
Finding quality, free-standing houses will become increasingly difficult, with higher-density apartment living providing the only solution to accommodate for the estimated minimum addition of 42,000 homes per year for the next 40 years.
Construction has already fallen significantly short of the targets needed to sustain the housing supply in Sydney, with the gap set to further widen due to shortages in labor and materials, and other red tape across the industry.
Rental Yield
Although houses may experience higher capital growth, they generally tend to have lower rental yields vs an apartment.
Rental yield is the cash flow and income generated from an investment property. Because apartments are often found in highly-convenient and central suburbs, they will also achieve excellent rents as well as minimal time vacant.
A high rental yield could also mean that your property is positively geared, with the income you make from rent covering or exceeding the costs of keeping the property, resulting in instant profit and more security.
Ready to take the next step?
If you’ve considered the above points and are ready to take the next step into purchasing an apartment, ALAND can guide you through the process and help you secure the perfect property.
With a 100% delivery rate across 3800 dwellings, 1200 under construction, and a further 5500 in planning, ALAND is in a strong position to deliver quality apartments that stand the test of time, in some of Sydney’s highest growth regions.
ALAND also has its in-house building management division, ALAND Care, who are committed to maintaining your building to the highest possible standard.
Browse our current developments or contact us now to speak with our expert team to learn about our latest opportunities. You can also check out our ultimate guide to buying an apartment in Sydney, and our first home buyers checklist to further support your property journey.
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