Houses vs Units

Houses vs Units: Market Data and Performance

When investing in or purchasing property, it’s essential to understand how houses and units perform differently in the market. Both property types have unique characteristics and can serve different investment or lifestyle goals. Here's an overview of the key trends and data to help you make informed decisions.

Performance of Houses

Houses generally perform well in terms of capital growth, as they come with the added benefit of owning the land, which typically appreciates over time. Here are some key insights:

Key Data:

• Stronger Long-Term Growth: Historically, houses tend to experience higher long-term capital growth compared to units, primarily due to the land component.
• Higher Demand: Houses are often in greater demand, particularly in established suburbs, due to the preference for more space, privacy, and the potential for future renovations or development.
• Price Premium: Houses typically have a higher median price compared to units, especially in high-demand areas where land is scarce.
• Lower Rental Yield: While houses usually achieve higher sale prices, rental  yields (income from rent vs property value) are often lower than for units, as the larger upfront investment impacts returns.

Who Might Benefit from Buying Houses?

• Long-Term Investors: Buyers seeking capital growth over time.
• Owner-Occupiers: Families and individuals wanting more space, privacy, and land ownership.
• Future Developers: Those looking to renovate, extend, or redevelop properties in the future.

Performance of Units

Units are often seen as more affordable and can offer attractive rental yields, making them a popular choice for first-time buyers and investors focused on cash flow. Key performance insights include:

Key Data:

• Higher Rental Yield: Units tend to offer higher rental yields compared to houses, as the purchase price is lower, while rental income can still be competitive, especially in urban or high-demand areas.
• Affordability: Units are generally more affordable than houses, making them an attractive option for first-home buyers or investors looking to enter the market with a smaller budget.
• Urban Popularity: Units in city centers or desirable locations close to amenities, public transport, and employment hubs can experience strong demand from renters and buyers, providing steady returns.
• Slower Capital Growth: Units generally show slower capital growth compared to houses, as the value is tied more to the structure than the land. However, in densely populated areas, units can still see good growth if demand remains high.

Who Might Benefit from Buying Units?

• First-Home Buyers: Those looking to enter the property market at a more affordable price point.
• Investors: Buyers seeking properties with high rental yields and lower upfront costs.
• City Dwellers: People looking for low-maintenance living, particularly in urban areas or near lifestyle hubs.

If you would like to learn more information, please reach out to one of our friendly brokers to get more information and received tailored advice and recommendations.