What is a more popular property investment – apartments or houses?

What is a more popular property investment – apartments or houses?

Nationally, 58% of flats, units and apartments are owned by investors.

That is quite an amazing statistic, especially when you compare that with detached houses where only 21% are investor owned.

Across the capital cities the proportions are even higher.

Darwin tops the list with 70.6% of all units being rented followed by Brisbane where 70.2% of all units are rented.

The lowest proportion, 60.3% in Sydney, is still significant. I would presume Sydney’s proportion is probably lower due to the city having the highest house prices (more owner occupiers choose units over houses thanks to the lower entry price), as well as the fact that Sydney is the most mature unit market in the country.

The high rate of investor ownership of apartments begs the inevitable question… why?

Similar to owner occupiers, it partly comes back to price points.

The unit market generally offers a lower buy in price (investors face affordability hurdles too!) than detached or semi-detached homes.

Based on median selling prices across the combined capital cities over the June quarter, units are 12% or $59,000 more affordable than houses.

The gap is widest in Sydney where unit prices are almost 23% or $139,000 lower than house prices.

Another valid reason is the fact that rental yields have historically been higher for units compared with houses.

The latest RP Data-Rismark indices show unit yields across the combined capital cities are currently at 4.9% compared with 4.2% for detached houses.

In fact, across every capital city, rental yields on units are higher than yields for houses (except Darwin where both are at 6.1% which are the highest rental yields across the capital cities).

Finally, it is often the case that units are located in more popular locations for both renters and owner occupiers. The majority of unit developments are located close to transport networks, major working nodes and retail amenity.

The high proportion of investors really doesn’t come as a surprise!



Subscribe & don’t miss a single episode of Michael Yardney’s podcast

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

Need help listening to Michael Yardney’s podcast from your phone or tablet?

We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.


Prefer to subscribe via email?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.

Tim Lawless


Tim heads up the Core Logic RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia. Visit www.corelogic.com.au

'What is a more popular property investment – apartments or houses?' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.