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March 20, 2015

Buy or rent? City or country? Then just when you thought you have the answers, you are confronted with yet another real estate conundrum: Apartment or house?

Not a few would agree that owning a home epitomises the Australian dream. There’s no place like home, as the cliché goes. But where is home? Is it in the standalone dwelling, with its own block of land? Or is it in the small domicile: a unit lumped with others on one block, where maintenance is minimised in exchange for concessions on parking space and areas for socialising?

It appears that the answer lies more and more in the latter. Whether owned through a strata title or their own land title, apartments have increasingly grown more palatable to first-time homebuyers.

According to the 2011 census, around 13.7 per cent of Australians owned and resided in apartments, flats and townhouses. In 2006, that figure was 12.4 percent.

Then again, the appeal of the freestanding house will always be evergreen. Bigger—houses are typically larger than units—is better, after all. Of course, size is just one in a long list of considerations, not the least of which is the question of long-term return on investment and the potentiality of rental.

Pros of buying an apartment

If price is a major issue, then high- to medium-density dwellings would almost always win. Granted, there are expensively priced apartments, e.g. penthouses, but they are often the exception rather than the rule. Houses, on the whole, are more expensive than units by 20 percent. For first-time buyers with an eye toward owning a standalone house later, apartments are cost-effective means of penetrating the market.

High-density units are favourable in that they are usually situated close to the city’s central business district, whereas standalone housing projects tend to the city periphery. The wider access to the creature comforts of downtown, plus the reduced commute, may seal the deal for homebuyers.

Homebuyers may also appreciate the fact that apartments are less of a hassle to regularly maintain than a freestanding property, with all its external amenities. Apartments generally require less insulation and cooling costs, compared with a larger residential property. The onus of maintenance and cleanliness in an apartment is largely on the strata management, the organization that owns the brick and mortar of the building. This is because you technically own only the airspace of the apartment.

In terms of investment, apartments are also superior choices. In Sydney, units that command great views of the waterfront can surpass houses in capital appreciation.

Pros of buying a house

Historically, however, houses experience higher capital gains over the long term. There is still a certain prestige attached to standalone houses that sit on their own land. In comparison, apartment owners are usually strata titleholders. Since the building itself is owned by a private company, apartment buyers technically own the interior space of the unit only.

For households with children and pets, the large living spaces expected of a house are ideal conditions. This perceived privilege emboldens house owners to charge a higher rent. Meanwhile, most body corporate regulations forbid the raising of pets in units.

With a house, you have more latitude in renovating and remodelling the structure to your liking. You have more liberty in choosing what and when to repair. In contrast, you generally have to seek permission to change the aesthetic and structural look of your unit. The maintenance, security, and improvement of the apartment block counts toward strata levies that are then imposed on owners. If the building has many common amenities, e.g. gyms and pools, the strata levies would understandably be higher.

Tips for buying a house or apartment

It’s almost nothing short of a golden rule to not buy a home if you’re highly peripatetic. If you can’t devote time to residing in a property, then you are probably better off renting. Otherwise, you may lose money if you sell too soon.

Apartment Vs House in Home Buying: Which is better?
However, if you’re the type to stay long, e.g. five years and beyond, then by all means buy. It may then be worth spending for additional points to reduce your mortgage’s interest rate over the years. Also, know that you can get low-interest mortgages from many lenders, private and public alike. To get a meaty mortgage, ensure that your credit score makes a good first impression.

It makes perfect sense to get a pre-approval from a lender before going on a house hunt; this will better inform your buying decision. In auctions, make sure to research the final selling prices of similar houses in the vicinity.

Even though your lender conducts house appraisals, take the initiative to hire a home inspector, especially an engineer seasoned in surveying. Inspections are just as important in apartment-hunting. A strata inspection report should be able to give you a clear picture of the apartment building’s current physical, financial and legal state.

Before snapping up an apartment, check its policies on pets, if you have any. Also check for the rate of levies if they’re reasonable enough.


In the end, a house will not always be better than a unit, in the same way that a unit will not always be better than a house. Both offer potentially lucrative capital growth; both are great types of housing in their own ways. It all boils down to personal preferences in dimensions, quality, and above all, location. Just be sure your heart is set on something that meets your needs and circumstances.
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  1. He stands fast by the scientific rationale behind everything, every creation, every action, every form. Science can explain it all. So be it.
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  2. Great Tips, really useful information about buying a property. Every property buyers need to know these things before buying a property. I like the way of your writing. Nice blog. Keep posting.

    Sathish from Property Management Chennai

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