Apartment vs House | 6 Key Issues

Apartment vs House | 6 Key Issues

What’s the best choice of property for you? ME Head of Home Loans, Patrick Nolan walks through the pros and cons of units versus houses to help you decide.

When it comes to choosing a first home, one of the key decisions is likely to be ‘house or apartment?’ There’s no perfect answer – both are equally good options. It’s a matter of deciding what suits your needs.

1 Affordability

Apartments definitely have the upper hand when it comes to affordability. In fact, based on median property values[1] you may be able to cut $100,000 or more off the price of your first home by choosing an apartment rather than a house.

2 Capital growth

The days when apartments were the poor relations to houses are over. Affordability, convenience and lifestyle factors have been big drivers behind the growing popularity of apartments. Quite simply, not everyone wants the maintenance associated with a house and garden.

There are exceptions though. Buying an apartment in a large, multi-story complex can mean there is a large number of almost identical units, and this could mean sluggish rates of price appreciation compared to houses in the same area.

3 Potential to add value

A house can provide far more options to add value through renovations. You have complete control to give the place a full make over, and importantly, you can renovate both inside and outside the house.

With an apartment the only renovations you can make are internal, and major reconfigurations may be out of the question because of the building’s internal plumbing and wiring configurations. On the flipside, the smaller square footage of apartments may mean you get a lot more bang for your renovation buck.

4 Lifestyle

Modern apartment complexes can offer all the mod cons including pools, barbecue areas and well-equipped gyms. So you get to enjoy the benefits of these lifestyle features without the hassle of upkeep that can come with a house and garden. Even better, many apartments are pet-friendly so your four-legged bestie won’t be left behind.

If you’re a dedicated green thumb, owning a house on land will definitely appeal to your love of gardening. Be aware though, owning a home comes with a raft of chores as well as delights. Clearing gutters, moving the lawn, fixing the fencing – it can all take up a fair chunk of leisure time.

5 Ongoing costs

One pitfall of apartments to watch for is strata levies – these cover the cost of maintaining common property. Older unit blocks usually have relatively low strata levies. Modern complexes, on the other hand, with sophisticated common facilities like pools, spas and gyms can have very high quarterly levies.

Check the sale contract for details of strata levies and be sure your budget can handle the cost – they can far outweigh council rates payable on a house.

6 Privacy

Apartment living does have a certain communal aspect to it, and if you relish your own space with a complete sense of privacy, a house may be the better option.

Even if you’re happy to share common facilities of an apartment with fellow residents, be sure to check the sound proofing qualities of the building. It’s one thing to share a lift with a neighbour, but it’s altogether different if paper thin walls mean you’re sharing the sounds of their opera collection at 2am.

[1] CoreLogic RP Data Hedonic Home Value Index, September 2015 Results Released: Thursday, October 1, 2015


Patrick is head of home loans with industry super fund-owned bank ME. He leads the bank’s home loan portfolio, including product development, pricing and marketing. Patrick has more than 14 years’ experience in consumer finance with institutions such as UBank, GE Capital and NAB. He also understands that the financial industry is cumbersome and complex. With simplicity at the forefront, his driving aim is to help ease concerns around money, put dreams within reach, and enable Australians to live the best lives they can.

Leave a Reply

Your email address will not be published. Required fields are marked *