For first-time homebuyers, the decision between purchasing a house or an apartment can feel overwhelming. While affordability is an important factor, it’s not the only consideration when choosing your ideal property. According to the ANZ CoreLogic Housing Affordability Report 2024, servicing a mortgage for a median value house requires 54.7% of household income, while an apartment requires 41.6%. However, factors such as your budget, lifestyle, and long-term goals should also heavily influence your decision.
Whether you’re looking for more space, proximity to work, or potential investment returns, this article explores the key aspects of both houses and apartments, helping you assess which option aligns best with your needs and future aspirations.
Key Factors to Consider Before Choosing a House or Apartment for Your First Home
To help guide your decision-making process, consider these important factors:
- Cost
Apartments are generally more affordable than houses, especially in metropolitan areas. According to CoreLogic data, the price gap between median capital city house and unit values grew from 16.7% in March 2020 to 45.2% ($293,950) by early 2024. As houses tend to come with a higher purchase price, your deposit requirement will also be greater. If affordability is a priority, an apartment may offer a more accessible entry point into the property market.
- Location
Apartments are typically located in or near city centers, providing easy access to work, dining, shopping, and entertainment. This can be ideal for individuals who prioritize convenience and shorter commutes. Conversely, houses are more commonly found in suburban areas, offering more space and a quieter environment. Location is subjective—some may value the hustle and bustle of the city, while others may prefer a peaceful suburban lifestyle.
- Lifestyle
The size of the property plays a significant role in determining which type of home will suit your lifestyle. For singles or couples without children, an apartment may be a more practical choice, as it requires less upkeep and offers lower maintenance. However, for growing families or those who value space and privacy, a house may be a better fit, providing extra bedrooms, a garden, and room for expansion.
- Future Plans
Think about where you see yourself in the coming years. If you plan to start a family or need extra space for guests, a house may be the right choice to accommodate your evolving needs. On the other hand, if your plans involve relocating or you prefer a low-maintenance property, an apartment could be a more suitable option. Your future intentions can help determine the best long-term investment.
- Amenities
One of the advantages of apartment living is the availability of amenities. Many apartment complexes offer shared facilities such as gyms, swimming pools, and communal gardens, which may not be present in houses. If you value these extras, keep in mind that apartment living often involves strata fees to cover the maintenance of such amenities. It’s important to evaluate whether these benefits align with your lifestyle preferences and if you’re willing to absorb the additional costs.
- Resale Value
When it comes to resale value, houses tend to appreciate more quickly than apartments, though the housing market can be unpredictable. Houses often offer greater potential for capital growth, making them a more lucrative investment in the long run. However, apartments in sought-after locations may also see solid returns, particularly if there is strong demand for rental properties. Assessing the property market and understanding future trends can help you make a more informed decision about the potential resale value of your home.
Conclusion
Choosing between a house and an apartment as a first-time homebuyer depends on a variety of factors, including your budget, lifestyle preferences, and long-term goals. If affordability, convenience, and low-maintenance living are top priorities, an apartment may be the ideal choice. Alternatively, if you seek more space, privacy, and room for future growth, a house may better suit your needs.
Ultimately, it’s important to think ahead and choose a property that not only meets your current requirements but also aligns with your evolving lifestyle and financial plans. Careful consideration of all these factors will help ensure that your first home purchase is a sound investment for both your present and future.
| Buying a House Versus and Apartment | ||
| Consideration | Apartment | House |
| Affordability | Apartments are typically more affordable and often located in prime areas that may be out of reach if you were buying a house | Higher upfront costs, such as stamp duty, inspections, and potentially LMI (if applicable), are required. You may need to save a larger deposit for a house |
| Maintenance | Low maintenance – Building management handles common areas and exterior repairs. | Higher maintenance – Homeowners handle all tasks like lawn care, roof repairs, and general upkeep |
| Security | Often includes security features like CCTV, 24-hour guards, and gated communities | Security depends on location and individual measures like alarm systems |
| Amenities | Access to shared facilities like gyms, pools, and community centres | Any additional facilities must be installed and maintained by the homeowner |
| Privacy & Space | Limited privacy and space due to proximity to other units and shared walls | Greater privacy and more space, including backyards and distance from neighbours |
| Renovations | Limited options due to building management rules; some renovations may require approval | Full control to customise and renovate both interior and exterior |
| Location | Often located in central areas or near public transport, workplaces, and cultural attractions | Can be located in suburban or rural areas, which may require longer commutes but offer larger properties |
| Investment Potential | High rental demand in urban areas; renovations can boost resale value | Can build significant equity over time, with potential tax benefits for mortgage interest and property taxes |
| Flexibility | Easier to sell or rent; good for those who value flexibility and mobility | Less flexible due to the higher costs and effort required to sell or relocate |
| Market Risks | May face slower value growth, which could impact resale returns | Higher exposure to market fluctuations, but long-term appreciation potential is stronger |
| Utility Costs | Lower utility bills due to smaller size | Higher utility bills because of larger size and additional features |
| Suitability | Suitable for first-time buyers, those on a budget, or people seeking low-maintenance living | Ideal for those looking for long-term stability, privacy, space, and higher appreciation potential |
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If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au or arrange a time for a meeting so we can discuss your requirements in more detail.
How can we help?
If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au or arrange a time for a meeting so we can discuss your requirements in more detail.
General Advice Warning
The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.
Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.
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