Property investment: apartments OR houses?

Should I invest in apartments OR houses? Is a property’s value is in the land OR a property’s individual characteristics are far more important?

In my opinion, the only thing that matters is what type of property will deliver a bigger return on investment in the long term.

According to the Real Estate Institute of Australia (REIA), there’s not much of a difference in price growth between each dwelling type. Over the past ten years (2000-2010), median house prices have increased by 81 percent, while median apartment prices increased by 72 percent.

“Historically, over a longer time frame, price rises for houses are greater than that for units, but this is not always the case over a shorter to medium time frame,” a REIA spokesperson noted.

For the financial year of 2012, apartment owners have something to celebrate this year: values went up, while those of houses went down.  Apartments recorded some growth, with an annual rise of 0.6 per cent.  House prices fell by 1.6 per cent in the year to September.

The reason for this might be the relative affordability of apartments, as well as their growing desirability. First-home buyers love them, which is just as well since most can’t afford houses anywhere close to the city.

The current median price for a unit in Sydney is $451,291 and the most popular suburbs during the past six months were mainly in inner and middle-ring areas.

Most of the apartment sales were in the central business district, with 296 recorded for the six months to September. This was closely followed by Dee Why with 293 sales, Parramatta with 286, Cronulla 262, Randwick 229, Mosman 205 and Surry Hills 203.

Of these suburbs, the CBD had the highest median price at $631,500 and Parramatta the lowest at $365,000.

Leave a Reply