Published on April 12th, 2018
Five reasons to buy a unitThe 1950s Australian dream may have been for a three-bedroom house on a quarter acre block. But is it really what suits you?
It’s still far more common to think about buying a house than a unit. Unit sales make up only around 20% of all dwellings in Australia. But the shift in demographics towards single-occupant homes, an ageing population, and high house prices all mean that might be changing.
Here are five reasons to consider purchasing a unit:
1. AffordabilityAffordability is a huge plus for unit buyers. Units are cheaper to buy than houses because they are smaller and you are not buying the freehold rights to land alongside the unit.
Having a lower price point into the market may be very appealing to first-home buyers, as it offers an excellent opportunity to get a foot on the property ladder. It’s also attractive if you’re looking to invest: adding a unit to your portfolio is less likely to leave you over extended at the end of the month.
When you’re running the numbers, take into account any strata fees or other building maintenance costs. In general, though, such costs are offset by the fact that you don’t have to maintain your own building insurance or pay for land improvements on top.
2. Lower running costsIt’s not just the initial price of a unit that’s cheaper: the ongoing costs are also usually much lower.
A smaller footprint means lower heating and cooling bills and fewer places where things can go wrong. As units typically have either a small courtyard space or a balcony, rather than a garden of their own, there’s no outdoor upkeep to speak of. Your kitchen is likely to be smaller, and there may be less of a need for as many split system units or reverse cycle ducted vents. The list goes on.
Modern buildings are often built to maximise natural air flow and insulation, so if you can find a unit in a highly eco-rated build your running costs will drop even lower.
3. Lock up and leaveThe low maintenance nature of a unit means it’s perfect if you travel frequently or spend long hours away from home every day. With no garden to look after, you can holiday without worrying about the plants dying off. Living in close proximity to others means you won’t be a target for burglars, and it’s easy to arrange someone to take in your mail.
4. Sense of communityUnits often appeal to senior Australians, and with good reason. Not only are they easier to take care of, which is a plus for ageing bodies. They also provide a sense of community and companionship. Even if it’s just a friendly wave across to the neighbour hanging out clothes on the adjoining balcony, it’s easier to keep in regular contact with people if you’re in a unit.
New arrivals to a city, or singletons freshly moved out of the family home, may also appreciate the company. Being able to knock on a neighbour’s door and ask where the nearest train station is might make the difference between a rough landing and a warm welcome to your new town.
5. Rental yield and capital gainsWith an increase in industry throughout Australia, as well as more development and funding in universities, schools, and tourism, there are more people looking to rent than ever before. There is also a demographic shift away from larger families and towards single-occupancy dwellings, making units more attractive for those people.
With a lower set of overheads to pay for, investors often find that a unit can yield higher rental returns than a house does. Units in many parts of Australia have also shown stronger capital appreciation, so if you do come to sell it down the track you can be confident of making a profit.
If you’re feeling good about having a unit in your life your local real estate agent, or agent in the area of your choosing, should be able to present attractive opportunities to you.