“Should I buy a house or an apartment, or even a townhouse, as my first property..?”

This is a common dilemma faced by many first home buyers as they consider which is the right option for them. This week our team at Loansuite explores 8 top reasons that you might want to consider an apartment as the preference for your first home.

1. Maintenance costs are likely to be lower

Typically, the maintenance costs for an apartment are shared as part of the strata for that particular development. This has some key advantages such as; not having to mow the lawn in shared areas, reducing your ongoing financial outlays for general maintenance, and if there are great building managers involved, this could reduce the overall wear and tear of your building. Maintenance costs, however, for a house can add up quickly, particularly if the property is a bit older.

2. It’s typically more affordable

In our previous article, we revealed that the median unit prices across the major capital cities are considerably lower than the median house prices. For example, in Sydney the median unit price as of 30 June 2021 was just $837,600 compared to $1,419,800 for a house, in Melbourne this was $630,400 compared to $1,002,800 and in Perth, this was $426,300 compared to $603,100. If you’re not looking to splash out over $500,000, or in the case of Sydney and Melbourne, over $1,000,000, looking at apartment options may be sensible.

It's important to recognise that an apartment may also allow you to get into the area that you want to live in, close to the amenities that you’re after whereas a house in the area simply may not be an option given the price hurdle.

3. Facilities may reduce your ongoing expenses

If you’re like our team, we enjoy going to the gym on a regular basis, as well as having regular access to the pool and spa. A gym membership could easily cost you upwards of $50, and in some cases north of $150, so having ready access to a well-equipped gym and other facilities may just save you a reasonable amount of money on an ongoing basis.

4. Reduce your transport costs

Given that having an apartment may be a more affordable option to buy into the area that you want to live in, you may also find that this could be a great way to reduce your transport costs such as public transport, petrol, or even tolls. If you’re able to live closer to your work, and the places that you’re regularly traveling to, this could save you a significant amount each week with your ongoing transport costs. You may even find that you can walk to work saving you a significant amount of time and money stuck in traffic.

5. Security is typically improved

Security is typically a key focus of a well-managed apartment building, and this will naturally have some variance between different buildings and management companies. Given there are multiple tenants in the building, ensuring the safety of all is and should be, a top priority. In many cases, there are usually many steps involved to actually get to your front doors such as intercoms, and even security gates and staff at the entrance. A house, however, may have a video and security system, however, this is typically the one layer of defence.

6. A growing market

We are seeing many more people that are looking to shift into apartments than we were just 10 years ago, and a startling difference compared to 20 or 30 years ago. Whether this is young professionals looking to be closer to their office and amenities, retirees looking to downsize as they no longer need so much maintenance, or even those living in regional areas looking for a hub in the metro area. This may make your property easier to sell or even rent out in the future if you’re looking to move on into something else.

7. A room with a view?

One of the other key benefits of buying an apartment as opposed to a house is that you may also find that you can pick something up with a great view, that simply would have been unattainable financially to replicate with a house. This may be a view across the bay, into the city, or out on the coast, but with an apartment, you’ll likely find that the entry ticket is far more affordable.

8. Better rental yield in many cases

Often, you will find that apartments generate a better rental yield than a house would typically. While this may not be terribly important in terms of your considerations today in looking at what you’re going to live in, this may be quite pivotal in your long-term planning, as it may allow you to continue to hold the property as an investment and rent it out when you decide to relocate or move into your next home.

If you’re considering buying an apartment, or even exploring your borrowing capacity, reach out to our team at Loansuite for a complimentary discussion.

Ally Home Loans Pty Ltd is your ally in finance for all of your home loan, investment property, business and commercial financing needs. With our wide range of lending solutions, expertise in financial planning and investment strategies, and extensive experience in working with both Australian residents and Australian expats, we are your partners for your lending needs.

Book an obligation-free, complimentary consultation here today.

Ally Home Loans Pty Ltd is an Authorised Credit Representative (Credit Representative Number – 494608) of My Local Broker (Australian Credit License – 481374). Important Disclaimer: Your complete financial situation will need to be assessed before acceptance of any proposal or product.