Whether you’re buying a home or investment, the first question on your mind will likely be: house or apartment? Often, this is dictated by price, location or a combination of the two.
It’s good to get this one locked in early, so you can narrow your search. The two main options are standalone houses and units. A townhouse is somewhat in between, so also worth considering. Each has its own pros and cons, which we’ll explore below.
Units
Units come in various forms, and depending on your state and location the terms unit, apartment and flat are often used interchangeably. Unit is generally a catch-all, which can be used for any medium to high density building.
Advantages
- Prices are generally lower than houses in the same area.
- Units tend to be located closer to shops, town centres and public transport, making living very convenient, particularly if you don’t drive.
- You won’t need to buy your own building insurance, this is covered by the strata levies.
- There is less maintenance involved. Garden work, cleaning of common areas, repairs and general maintenance are handled by the owners corporation, rather than owners themselves.
- A greater sense of security, particularly on higher floors where intruders are unable to climb in through open windows.
- Building repairs are shared and funded by strata levies. So if you have a roof leak and water is entering your unit, you won’t need to pay for the repairs.
- Units on high floors can have beautiful views, something that can’t be replicated in a house. However, the stunning views come at a cost, with higher apartments costing more.
- Units tend to be popular with busy professional renters, due to convenient locations and low maintenance.
Disadvantages
- Strata levies need to be taken into consideration. This is paid quarterly by all owners and can be a significant expense of owning a unit. If a major problem with the building occurs, owners may even need to pay an additional special levy to fund repairs.
- You can’t make changes to the exterior of your unit, without permission from the owners corporation. If you wanted to paint your balcony a different colour, this would likely be declined. Often strata schemes have by-laws, which can also dictate things like the colour of window coverings. So if you want bright pink curtains, there’s a chance other owners may object and you’ll be forced to remove them.
- Minor interior changes may also need strata approval. In a strata unit, you own the air inside your unit. Everything from the layer of paint on the wall down, is common property. Technically speaking, even drilling a hole to mount a picture on the wall would need strata approval.
- Major internal changes such as a bathroom renovation where the waterproofing is being removed, will need approval. There can be significant costs involved. You will not only need strata approval, but a by-law written by a lawyer. The by-law indemnifies the owners corporation in the event of any water leaks. This means you, or any future owner of that unit will be responsible for any failure of the waterproofing membrane.
- Most apartments and many flats have common walls. If you have noisy neighbours, this can impact on your own comfort and enjoyment. You also need to get used to people coming and leaving late at night and early in the morning. Particularly if you’re a light sleeper.
- Some high density apartment complexes have lending restrictions. Certain lenders may not lend as much against a high density apartment. This can vary by suburb, or even the specific building in some cases. Speak to us if you’re planning on buying an apartment and we can check for any lending restrictions on that building.
- Capital growth can be slower when compared with houses. Particularly post-covid, with the trend towards standalone living. Some areas with an oversupply of high density apartments have seen prices go backwards in recent years.
Townhouses
A townhouse or villa falls in between units and houses and has features of both. They are usually strata titled and may have common walls or be stand alone. Generally you also have your own small garden or courtyard. In some areas, particularly regional markets, townhouses can also be referred to as units.
- Generally more spacious than a flat or apartment and will feel more like a house.
- Most townhouses will have at least a small garden on title, which belongs to you. You’re able to grow some fruit or vegetable plans, or provide an area for a dog to play. There may be some restrictions on planting large trees or plants that could impact other neighbours.
- Townhouses are smaller and normally more affordable than houses. They’re also popular with busy families, having less maintenance than a freestanding house, which has a larger garden.
- Like units, there are still limitations on what you can change within your townhouse. Certain modifications will require strata approval.
- Strata levies can also form a significant part of your ongoing expenses, although these tend to be lower than for apartments.
- Capital growth may be slower than with standalone houses, as it’s the land that appreciates. With a townhouse, you own a smaller block than when buying a house.
Houses
A standalone house offers the greatest freedom and flexibility. You own the land and the house, and can make changes and modifications as needed, subject to council approval.
Unless your house is part of a newer estate or in a heritage conservation area, generally there won’t be restrictions on cosmetic improvements, such as what colour you can paint your house. Properties in a heritage conservation area, or that are themselves heritage listed, may have very rigid council restrictions on what cosmetic changes can be made to the facade.
- Greatest flexibility to make your own design and garden planting choices.
- More space and privacy, often preferred by families with children and pets.
- Capital growth tends to be faster than with units and townhouses. Particularly after Covid-19, as many Australians now prefer to have more personal space and comfort at home.
- When you buy a house, you are actually buying land with a house on it. You are then the sole owner of this land, unlike with a unit where you only own a portion of the total block of land.
- Prices are higher than units in the same location. Particularly houses in convenient locations, close to shops, schools and public transport can be many times more expensive than units.
- More maintenance, with a garden that needs upkeep and regular house cleaning and repairs. As the owner, you are responsible for managing everything or organising services to assist.
- Some people feel houses are less secure, and there is a greater need for personal security. Window locks, deadlocks on doors, security cameras and other deterrents may be needed to protect a house. Particularly where windows are easily accessible from ground level.
Ok, so which is better?
Well, there’s no one size fits all answer. This will largely depend on you and your family. To help you decide, consider these questions:
- What is your budget? If you’re unsure, reach out and we can calculate an accurate budget for you, ensuring you don’t overcommit yourself.
- What type of home do you currently live in? Are you happy with it or do you want to try something different?
- What are the most important characteristics you look for in a home? Unsure where to start, check out 6 Things to consider when buying a property
- How long do you plan to stay in this home?
- Are your family circumstances about to change? Are you expecting a baby, marriage or moving interstate or overseas?
- What is your investment strategy? Will this property be your first investment, or do you already have an existing portfolio?
Different housing options cater to different needs. After spending some time, you’ll start having a clearer idea of which way you’re leaning.
If you’re unsure and want to have a chat to brainstorm, give me a call any time. Or simply send through your details in the form below. I’ll be happy to explore all options with you, and show you what’s achievable in your budget and location.