July 13, 2023

Could apartment living help you dive into the property market sooner?

Back to all posts

Buying a home for the first time can be challenging, especially with house prices soaring in recent years. So could switching from house hunting to unit searching be the way forward for you?

Buying a home for the first time can be challenging, especially with house prices soaring in recent years. So could switching from house hunting to unit searching be the way forward for you?

There’s no denying that getting into the property market in today’s economic climate ain’t easy.

The average Australian house price is now $725,000 – that’s 30% more expensive than the average national unit price.

Compare the price gap to September 2021, when the national median house price was $570,000 – just 9.6% higher than the median unit price of $520,000.

But is opting for a unit the right move for you?

Today we’ll look into the pros and cons of buying an apartment for your first home.

Affordability, lifestyle and location

First the pros: units are usually more affordable than houses.

Median capital city house prices have grown 31.6% in the past five years, while units have only increased by 9.8%.

Lower prices can not only make it quicker for you to save a deposit for an apartment, they could also make you eligible for better stamp duty concessions (either reducing your stamp duty bill or eliminating it entirely, depending on your state or territory).

And while a unit may not always have space to accommodate future expansions to your life and family, they are often located in thriving local community hubs with amenities, shops, and transport on your doorstep – great for young families still wanting to be in the thick of the action.

Potential for investment

Admittedly, owning a house can have advantages over owning a unit.

For starters, you don’t have to fork out for body corporate fees. And the capital growth you can gain from owning the plot of land your abode sits on often makes house ownership more attractive.

But buying a unit – rather than holding off until you can afford a house – also offers investment potential.

By purchasing a unit, you’re investing and building up your own equity, rather than paying off someone else’s mortgage if you’re renting.

So while you may not be able to buy the house just yet, an apartment can provide a valuable stepping stone to reaching that goal.

And should you be in a position to hang onto your unit when you upgrade to a home, you may get some decent rental income – if you buy in the right spot.

On top of this, unit upkeep can be easier because those body corporate or strata fees go towards various maintenance activities.

Other affordable options

All that said, if apartment living isn’t for you, there are other cost-effective options for you to explore.

You could consider searching slightly further afield, with recent research identifying “sister suburbs” that are up to 200% cheaper than their in-demand neighbouring suburbs.

Rent-to-own arrangements could also make it easier for you to crack the market. These arrangements enable tenants to buy the property they’ve been renting once the lease ends, at a previously agreed price.

And whether you’re in the market for a house or a unit, there are government schemes that can help you fast-track home ownership and save.

The federal government has three low deposit, no lenders mortgage insurance (LMI) schemes available for eligible first-home buyers, regional first-home buyers, and single parents.

Eligible buyers can purchase a home with a deposit as little as 5% through the First Home Guarantee and Regional First Home Guarantee. While the Family Home Guarantee assists eligible single parents and guardians to buy with a 2% deposit.

Not paying LMI can save you anywhere between $4,000 and $35,000 – depending on the property price and your deposit amount.

The good news is that eligible first-home buyers can bundle the federal home guarantee schemes with other state government first-home buyer grants and stamp duty concessions for major savings.

Get in touch

If you’d like to give renting the big swerve and get a place of your own, give us a call.

Not only can we help you find a suitable loan and help organise your finances, we know the government schemes you may be eligible for to help get you into your first home sooner.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

We will look at your current finances and let you know where you can get more.

We will evaluate your current financial situation and maximise your borrowing capacity.

Contact Us Today

Other Recent Posts

Home buyers rejoice! More listings are hitting the market

Great news for home buyers! After an extended run of low listings, the number of homes coming onto the market is skyrocketing. So could this have an impact on the property market? Let’s take a look.

Read More.

They’re back! Why property investors account for one-in-three new home loans

Lending to property investors is soaring once again. We lift the lid on what’s driving investor interest – and what it could mean for the property market throughout 2024.

Read More.

When will the next RBA cash rate call be made?

Happy days! The Reserve Bank kept rates steady in February. But a shake-up in the number of times our central bank meets each year is raising questions about how long the rate pause will last. Here’s what we could expect.

Read More.

Want to know more? Subscribe to our Newsletter

For more tips, tricks, news & events and everything else you need to know about your finance and property investing journey, sign up to our Newsletter.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.