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By: Renee Kiley
‘Should I buy a house or an apartment?” Is a question we are asked frequently by investors and potential investors.
Adding confusion to their hunt for answers is the endless commentary suggesting that there is only one way to go to “guarantee” capital growth; self proclaimed property experts and companies within the property industry will generally be fans of either one or the other. They are very vocal about the negatives of the property type they don’t like or believe in (or understand for that matter!) and often draw on incorrect data, or isolated census statistics to support their chosen asset class and draw people in to their line of thinking.
Let’s look at some simple facts and figures that might shed some light on this debateable topic:
Sound like a pretty even battle? That’s because it is.
More than two thirds of purchaser’s at any given time in the property market are owner occupiers. Owner occupiers buy with emotion which helps drive property prices up. So if you are looking for capital growth (not just yield) you need to be thinking and buying like an owner occupier in the area. There would only be a very small percentage of home buyers who would want to live in a one bedroom unit in Ringwood for example where most residents are married with children, just as there would be a very small percentage of buyers who could afford to live in, rent or buy a $2.5 million house in South Melbourne where there is a very high percentage of lone person households. Research is the key.
Over the long term, if you purchase the right style of property (apartment, house, townhouse), that is right for the area (distance from the CBD, land content, quality, size, value, demographic profile of the area) and give it time (15 years +) I guarantee that an apartment and a house bought at the same time will perform almost identically.
DISCLAIMER:All information provided in this publication is of a general nature only and is not personal financial or investment advice. It does not take into account your particular objectives and circumstances. No person should act on the basis of this information without first obtaining and following the advice of a suitably qualified professional advisor. To the fullest extent permitted by law, no person involved in producing, distributing or providing the information in this publication will be liable in any way for any loss or damage suffered by any person through the use of or access to this information. The article is produced by Property Way (ABN 57 141 982 934)