Apartment or detached house – which is the better option for your next home?
The answer to this question depends entirely on your wants, needs, financial situation and your lifestyle. That means we certainly can't make the decision for you, but we can help you along the way.
With the aim of doing just that, we've put together a run-through of the pros and cons of apartments for Melbourne home buyers.
Why should you buy an apartment?
Apartments are the way of the future in central Melbourne. In fact, the Housing Industry Association's most recent forecasts show that there will be more units built in Victoria in 2017 than any other state in Australia except for NSW.
One of the main benefits of apartments and units is their price. CoreLogic RP Data shows that on average they're around $400,000 cheaper than houses in Melbourne, which is a hefty sum by any measure. First home buyers, young families and the budget-conscious should certainly take note, as it's possible to find an affordable home near the centre of the city if you're willing to live in an apartment.
You may sacrifice a lot of space, however you could also save on time and money maintaining your property. Generally, apartments require far less attention as you're usually only responsible for what's inside your four walls. That could mean no gardening, no lawn-mowing and no exterior painting.
What are the drawbacks of apartments?
There will be more units built in Victoria in 2017 than any other state in Australia except for NSW.
While you usually won't have to take care of the exterior of your building, someone does, and that's where body corporate fees come into play. Strata Consultants Australia estimate that these cost around $2,500 on average per year, but they can vary depending on the age and state of your building. Make sure you find out what your apartment's body corporate fees are before committing, as sometimes these can be extremely high.
You'll also have to be prepared to live in a smaller space – Australian Bureau of Statistics data shows that apartments are around 70 m2 smaller than detached houses on average. That won't be a problem for travelers or young professionals, but for growing families with pets and kids it might be a deal breaker.
Lastly, if you're buying for capital gains, apartments may not be your best bet, as apartments generally increase in value at a far lower rate than houses. In fact, CoreLogic's most recent data shows that houses increased in value by 14.2 per cent for the year ending February 28, while apartments only increased by 3.3 per cent. If you're planning to use equity to purchase a bigger, better and more expensive property down the track, buying a detached house is usually the way to go.
What's right for you?
Every home buyer is different – that's why it's always best to consider the facts. If you're looking for an affordable, low maintenance and centrally located home, buying an apartment's probably the way forward for you.
On the other hand, if you're looking for value gains, extra space and are ready to do a little more maintenance work, a house could be your best option. Spend time considering which type of property best suits your lifestyle and your needs, and you'll walk away with peace of mind knowing you've made the right decision.