For many Aussies, the image of a ‘typical’ Australian home might be a brick house in the suburbs or an old weatherboard by the beach.
And while freestanding houses still dominate the Australian landscape, as space and price pressures continue to weigh on many of our major cities, the need for and appeal of smaller homes like apartments is continuing to grow.
In fact, according to 2016 census data from the Australian Bureau of Statistics, apartments and flats now make up over 13% of housing stock in the country.
But just what are the benefits and drawbacks of purchasing an apartment? Whether you’re buying an apartment to live in, or as an investment property, these are the key costs and features you’ll want to know about.
Benefits of apartment living
1. Cheaper to buy
Of course price will always depend on a number of factors including location, the age of the building and the size of the residence, but for many buyers the major attraction of apartments is that they can typically be bought for less than a freestanding home.
For example, according to Domain’s House Price Report for September 2018, the median apartment price in Sydney was $734,775 compared to $1,101,532 for houses.
Apartments can also be cheaper when it comes to ongoing bills such as electricity. After all, heating and cooling a smaller apartment is going to cost a lot less than the typical house.
2. Easier to maintain
Not a fan of spending your Saturday mornings vacuuming room after room? Well with less floor space, apartment living might be the low maintenance solution to your cleaning headaches. Plus cleaning the gutters, mowing the lawn and repainting the outside of the house will become chores of the past.
3. Greater amenities
Not every apartment building will come with a pool or a gym, but many do, not to mention other perks like tennis courts, underground parking, doormen and even on-site childcare centres. So if the idea of a swim just steps from your door or being able to work out in (relative) privacy appeals to you, then an apartment complex with these amenities could be right choice.
4. More secure
The levels of security will obviously be different from one apartment complex to the next, but many buildings will feature security doors at their entrances as well as secure parking garages - likely a step up compared to the average house.
Drawbacks of apartment living
1. There’s less space
Part of the reason apartments tend to be a lot cheaper to buy than houses is the simple fact that they’re often smaller. While this may be perfectly fine for someone living by themselves, a young couple buying their first place or down-sizers looking for something more appropriate for their needs, the lack of space in apartments won’t be ideal for many larger families - particularly if a garden or lawn is a top priority!
2. You won’t have the same privacy
Unlike a house, you’re likely to be sharing a lot of space in an apartment building or complex with your neighbours, including any of the amenities listed above or any green spaces. Because you’re a lot closer to a lot more people you’re also going to be able to see and hear them more - whether that’s someone doing their morning stretches in the apartment across from you or a Friday night party on the other side of the building.
3. Strata fees and restrictions
Strata schemes - in which the the buyer of an apartment becomes part of at purchase - are a reality of apartment ownership in Australia. As part of a strata scheme, apartment owners are responsible for a share of the upkeep and maintenance of the communal areas of the building or complex including gardens, stairwells and elevators.
This shared responsibility obviously comes at a cost in the form of strata fees, and it also means that renovations or alterations to an apartment may need to be approved by an owners committee.
4. Parking can be limited
Not every apartment comes with a parking space attached, especially smaller one bedroom units. In fact, buyers who own a set of wheels will often need to pay a substantial premium for apartments with a parking spot. This may not be a concern if you don’t own a car or don’t mind street parking, but if you own multiple cars an apartment might not be the option for you (unless you’re willing to pay a premium).
Of course at the end of the day working out whether buying an apartment or a house is the right decision is going to come down to your own personal needs. But if you are thinking about taking the property plunge, the first step is to work out just how much you’re going to be able to borrow to fund your apartment purchase.
Find out now by plugging in a few simple details to the Mozo home loan borrowing calculator, or if you’re ready to find a great mortgage match, head over to our home loan comparison tables for the latest rates and deals.