Apartments Vs Houses

The Australian dream has changed. There’s been a shift. We’re changing how we live.

What people once wanted in a home is not necessarily what they want now.

What Residents Want

For a long time, buyers and renters alike wanted family homes on big blocks … plenty of room for activities and stuff. So, investors followed suit and bought up plenty of house and land packages that helped them ‘live the dream’. While this wasn’t a bad plan at the time, it’s not the kind of plan that will make investors these days be able to kick back and reap the same benefits… certainly not if this is the only housing type in the portfolio.

What’s changed? Priority has shifted to convenience. Low maintenance homes in close proximity to quality amenities are more highly favoured than land that’s further away and requires weekends spent mowing, cleaning and maintaining. If you had the choice wouldn’t you rather walk to the beach instead of walk laps around the yard with the mower?

The Australian dream is now to live a full life with lots of opportunity within reach. This is the key difference in the future of property demand, form and use.

When we look at the Sunshine Coast, a region that is booming and expecting considerable inter-state migration growth, we see that just 35% of that growing population will be housed in greenfield sites (new house and land suburbs such as those being developed in Caloundra and Palmview). But what about the other 65%? The vast majority of the growth will be in ‘infill’ properties – duplexes, triplexes and other small developments and townhouses and apartments. Even some of these greenfield sites have large amounts of terrace housing and townhouse and apartment sites to cope with the demand.

It is these types of higher density of living where we are seeing the greatest return on investment and the growth in demand into the future.

Demand is rapidly increasing for convenient living and even more so where the apartment or complex ‘takes care of itself’ and its residents instead of the reverse.

For example, we’re seeing this in the uptake in luxury apartments with facilities that improve lifestyles such as pools, saunas and gardens; especially those with on-site management (someone to take out the bins, mow the lawn, tend to the gardens, clean the pool and keep things moving and working). When they are within walking distance to further lifestyle enhancing amenities such as restaurants, entertainment, water, shopping and the like, these offerings really take the cake.

Weighing this up against a block of land and a detached home that requires driving everywhere and the resident taking care of all aspects of the property, many buyers and renters are choosing the easier, more enjoyable option.

When it comes to price, generally the closer to the action and the more amenity, the higher the price. But if you’re an investor choosing the top location and bells and whistles, you can charge a higher rent and get greater returns. We talk more about this in our article on Amenity Vs Affordability.

But what about all the extra fees associated with apartments, townhouses and duplexes you might ask?

You might think house and land is the safe option to invest in and you don’t have to worry about body corporate fees. But if you’re not putting aside money instead of body corporate fees for your own property, you might get into strife when something needs repairing like a roof, fence, hot water system etc. Whether it’s a body corporate arrangement or freehold, either way you have to pay for repairs, but at least in a body corporate arrangement you know someone else is actively maintaining your investment and has a budget for planned maintenance and worst-case issues. Not to mention that your building insurance is covered, as is the person looking after the pool and lawn!

If you’re still not convinced to explore other housing investment options, that’s OK. We can guide you on the best house and land options around. Just make sure you get the info below the macro statements because if you do what’s been done by so many others you might end up with the same mediocre (at best) results others get.

However, if you want to build wealth and achieve freedom through property investment, we highly recommend a balanced portfolio. Consider a range of property types that play to the increasing demand (what buyers of the future are rating higher than buyers of today), offering convenience and comfort. As life gets busier and busier, an easier accommodation offering is where more people will choose to come home to.