Unit vs. house – which is a better investment and why?

Published on December 4th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

At Savvy, our mission is to empower you to make informed financial choices. While we maintain stringent editorial standards, this article may include mentions of products offered by our partners. Here’s how we generate income.

There is a question that torments most people when they want to purchase their own home and make a smart investment: Should I buy a house or an apartment?

No one has ever been able to come up with a clear-cut answer because there are many things that can determine the profitability of a property. Usually, the answer depends on the market and the place itself. Sometimes, it may be better to buy a house and other times you are better off purchasing a unit.

Proper Research Brings You to the Best Investment

Before buying a property, you need to do some background research and see the development of the marker. That being said, you shouldn’t just focus on the property, but on the market as well. Before buying a house, there are three main factors you need to keep in mind.

  • Affordability: Look for a place that will bring you the most money. Since you invest in the place, you want it to bring you profit; thus, it doesn’t matter where it is as long as the market is on your side.
  • Long-term Supply & Demand: Check what’s being built and what’s being approved. Depending on the projects, you might find yourself with an oversupply of houses and units in the future.
  • Economics: Always pay particular attention to how the market changes. Go for the places that have a lot of potential to create jobs in the future, or which seem to start prospering.

Sometimes, it’s not the living quarters that are important, but the area and the future potential of the place.

Investing in a House

Once you invest in a house, the place becomes your sole responsibility. You must pay for all the upkeep, repair etc. This can cost quite a lot of money in comparison to an apartment where generally all upkeep is bundled into strata fees which could end up being cheaper than upkeep on your house. However, houses can prove more valuable if you take into account the land. If you purchase a house located in a good area in accordance with the three factors mentioned previously, you might have more advantages in the future.

Investing in an Apartment

When you get an apartment, you need to take into account the area as well as the utilities. If the complex has fancy features like swimming pools or lifts, the costs will go up. Not to mention that if those features need repairs, they might cost a small fortune. Also, in some areas, the size of the complex and the living quarters can be an issue.

However, units can prove to be more affordable on the market compared to a house, and you also have the benefit of maintenance and insurance from the body corporate. Granted, you won’t have the benefit of the land, but you will have your four walls and lowered taxes if you’re only looking for a place to live.

The debate still continues, but most of the time, it all depends on the current needs of the tenants. However, it’s a known fact that apartments are becoming more and more popular in Australia, as they are continuously bought and sold every day.

Did you find this page helpful?

Thanks for your feedback!

This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Approval for home loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.

The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

In this article

Share this article

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on pinterest

Looking for a home loan?

Compare Australia’s reputed home loan lenders with us and save.

* Terms and conditions and lending criteria apply.

Smart money saving tips

Subscribe to our newsletter.

By subscribing you agree to our privacy policy

Related articles

Easily compare home loan options today

We compare home loan options for you so you can be assured you’re seeing the most competitive interest rates available in Australia.

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy broker and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.