House Versus Units for First Home Buyers
ITS the age old question that haunts almost every first home buyer – Should I buy a house or a unit? We will try to answer that question for you here with some simple comparisons but it will all come down to that same basic qualification in the end – location and need.
How to Compare Houses vs Units
What do I really need to suit my lifestyle? Only you can answer that. We will start looking at House versus units for first home buyers by studying the two main comparisons, value for money and location:
- Value: On average a house will appreciate in value much more than a unit but it is also more costly to purchase in the first place and this aspect of the argument must be taken into consideration when evaluating the House versus units for first home buyers on all occasions. Over the last 10 years the average house price in Sydney has increased by a massive 120% whereas a unit has increased in value by just 80% but this is only based on an average figure. Individual units have outperformed houses on other occasions, depending on location and proximity to the CBD.
- Location: A unit will normally out perform a house in value terms regarding location if you take into account the proximity to the CBD once again. A house within a fifteen kilometre radius of the CBD would be out of the reach of many first home buyers whereas a unit could be well within their financial capabilities.
- Renovation: A way around this is the consideration of a house in need of renovation. Such property will also give a far greater return in value when the renovation is complete and it makes the term House versus units for first home buyers a whole new meaning.
The True Costs of Buying a Renovator’s Dream
The practice of the past in buying a house mainly to capitalize on its fast appreciating value may well become a thing of the past if housing prices stabilize as is believed they well may according to many observers.
But there is still much to be gained in buying an older property in need of renovation if close to the CBD as it will add value back to its overall worth in the general housing market. The days of renovating as a kind of ‘get rich quick scheme’ has passed. For this reason housing should be now looked on as being a long term investment.
Renovation costs: Renovation is not cheap if you can’t do it yourself. And if you have to employ outside contractors it can be quite costly as the following Housing Industry Australia (HIA) average renovation cost figures indicate:
- ground floor extension $110,000
- second floor extension $115,000
- kitchen $22,000
For the person wanting to live close into the CBD a unit is well worth considering as it will be cheaper than a house in the same locality and you will have the benefit of better public transport and access to centralized events such as the theatre, sporting events and museums etc. As well as less maintenance worries.
If the benefits of living close to the city centre is not all that important to you then a house purchase will on most occasions give you better value further out in suburbia. But you will on many occasions lose out on the public transport issue. This could be an important aspect of your decision if working in the CBD.
Location, Needs, Location
It all comes down to locality needs. If you are seeking a home within close proximity to public transport and reasonable close proximity to your work you would be well advised to look seriously towards its purchase as in all likelihood its value will continue to appreciate well into the future.
If you want to live in close proximity to the city with all the advantages that go along with such a lifestyle then a unit is what will most likely give you what you are looking for.
If you are a first home buyer, buy your home as a long term investment. If it is well located you will be well rewarded with an investment attracting reasonable capital growth value over the long term.
If you have chosen to undertake renovating an older home then time will reward you for your decision but talk to Home Loan Finder now to make sure your budget will come out on top.
Related posts:
- Units Are More Affordable & Can Have More Capital Growth Potential than Houses
- Buying A House Within Your Budget
- Pros and Cons Units vs Houses
- Location and Security Preferred Over House Size in Home Buying
- Best Home Buys Near Perth CBD
- Where to Buy Units
- Rent versus Buy a House?
- First home buyers – losers in the NSW budget
- First Home Buyers’ Buying Trends
- Can you Afford a House Without Government Incentives?
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