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Should you buy an apartment or a house?

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Outside view of the top floor of an apartment building

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Buying property is a big decision and finding the right one isn’t always easy. One of the first choices you’ll likely face is whether to buy an apartment or a house.

There’s no right or wrong answer to this. The choice comes down to your finances, lifestyle, and needs.

To help you make a decision, we explain the pros and cons of both options.

Should I follow the Australian dream and buy a house?

Owning a freestanding house has always been the Australian dream. Detached homes account for 72.9% of the market compared to 13.1% for apartments. But is it right for you?

The pros of buying a house

  • A house is ideal for families who need space and want a backyard for kids, pets, or to entertain.
  • Should you want to renovate or build on, you are free to do so without any restrictions.
  • In terms of investment value, houses usually generate higher capital growth than apartments. So, if you’re buying an investment property, a house may yield a better return on investment.

The cons of buying a house

  • Houses usually cost more to buy than apartments. With that comes higher mortgage repayments
  • Household expenses may also be higher, with a larger space to heat and cool plus ongoing maintenance. If you enjoy gardening and tackling DIY projects, you’ll love owning a house. If not, you may need to hire gardeners, handymen, contractors and pool maintenance services, all of which are additional expenses.

Is the convenience of apartment living a better option?

Apartment living is on the rise in Australia and they’re getting bigger. In Western Australia, the average house size has shrunk from 327.2sqm to 225.3sqm while apartments have grown by 16.4% to 155.8sqm. Once the domain of a younger demographic seeking a lock-and-go unit in the city, these larger apartments are starting to attract families.

If you’re considering an apartment, here’s what to consider:

The pros of buying an apartment

  • Apartments tend to be more affordable to buy than houses, so it’s easier to get your foot on the property ladder.
  • The main advantages of apartments are convenience and less maintenance. The strata management oversees the upkeep of communal and outdoor areas.
  • If lifestyle is a deciding factor, some apartments offer amenities like a swimming pool, gym, and recreation areas. In more luxury apartments, you may have rooftop bars and pools, jacuzzis and saunas. Many apartment complexes are also situated in urban areas near public transport, grocery stores, and restaurants.

The cons of buying an apartment

  • The disadvantage of buying an apartment is living under strata management. Should you wish to make renovations, you will have to abide by the strata rules.
  • While you’re free of dealing with maintenance issues, this comes at a price. You will pay fees towards the complex’s maintenance and repairs. The more amenities, the higher the fees usually are.
  • Apartment living means less privacy as you live close to your neighbours. Noise from other residents can be a problem. If the apartment is close to a busy road or near the nightlife scene, you may be facing many sleepless nights.

When choosing between a house and an apartment, your lifestyle and future needs influence your decision, but so too does your budget and location. Property prices vary from region to region. In an expensive city like Sydney, you may only be able to afford a small apartment. Over in Adelaide, you may find a three-bedroom house at the same price.

Whichever option you choose, we recommend shopping around for the best mortgage rates.

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