In his recent column in Switzer, John McGrath weighs up the benefits of buying an apartment instead of a house.
You may be surprised where you can afford to live if you choose the apartment.
Here’s what he had to say:
Apartment living provides a lot of advantages and conveniences but the greatest benefit of all – particularly in our most expensive cities, is their affordability relative to houses.
CoreLogic RPData recently released a report that shows just how big the gap can be between house prices and apartment prices in individual suburbs, and many of Australia’s most desirable areas are on the list.
The great message here is that apartments are affordable – and therefore accessible, to budget buyers pretty much everywhere and even in our most prized residential suburbs.
Take a look at CoreLogic RPData’s list below – the number one suburbs in each state with the largest differential between house and apartment prices are high quality, premium locations.
I think some young buyers, in particular, assume that blue-chip areas are out of reach financially because they’re full of multi-million dollar homes.
It’s a perfectly reasonable assumption but this research proves that with a decent budget, apartment buyers have more choice than they might think.
Nationally, the suburb with the greatest difference between house and apartment prices is Centennial Park.
This is a beautiful, leafy area in Sydney’s Eastern Suburbs, just a short bus ride to the city and an easy walk to Oxford Street boutiques and nightclubs, as well as Paddington and Woollahra café villages.
The median house price is $5.105 million.
The median apartment price is just under $600,000.
That’s a differential of 752%.
Look at Toorak in Melbourne – undoubtedly one of the city’s finest suburbs where houses command a median price of $3 million.
But you can live in an apartment for just under $675,000.
That’s a differential of 346%.
How about Ascot in Brisbane?
Once again, a highly desirable and sought-after suburb where the average house will set you back almost $1.3 million but you can buy an apartment – and enjoy all the amenities and prestige that an Ascot address carries, for just over $400,000.
That is well within what we now consider to be a modest first homebuyer’s budget.
First home buyers in many states are being incentivised through government grants and stamp duty concessions to buy new apartments to support our construction industry.
Demand for new apartments is very strong – not just from first timers but also Australian and overseas investors, so we’re seeing a lot of new high rises coming online in CBD and inner city locations where big developers can get approval to build big buildings.
If you don’t want to live in the city, or you want to avoid the high-rise lifestyle (and the high strata levies that often come with it), you should be bookmarking small developers’ websites and monitoring their projects.
There are plenty of them out there and most of them are building in premium well-established suburbs.
They’re buying large blocks, knocking down old houses and building small boutique apartment complexes or a row of four of five townhouses often in very desirable streets.
So if you’re looking to buy an apartment, don’t dismiss the big blue-chip suburbs in your state.
Check out this list and perhaps do some research in some of these suburbs.
You might be quite surprised at where you can afford to buy.