Buying an apartment: pros and cons

Thinking about buying an apartment, but not sure whether it’s the right move? Below are some of the pros and cons you should consider before taking the leap. 

Pros of buying an apartment 

First, let’s discuss some of the benefits of buying an apartment or unit. 

Cheaper than a house 

With consistently rising house prices, buying an apartment could be a more affordable and accessible path to homeownership. According to the latest Domain figures, unit prices are only at $722,811 in combined capital cities and $581,301 in combined regional areas. Compare this to house prices, which are $1,280,159 in capital cities and $736,166 in regional areas, and you’ll see that units are much more inexpensive. 

Since apartments or units have a lower property value, it’s much easier for homebuyers to save up the 20% deposit. Getting a home loan approved may be easier as well since you won’t be borrowing as much money. 

Access to sought-after suburbs 

You’ll find many units and apartments located in or near the CBD, beachside sanctuaries, or other popular suburbs. If you want to live in these sought-after locations but don’t have the budget for a house, choosing an apartment may be a suitable alternative. 

Alternatively, if you want to buy an investment property, you may find that units in the CBD or holiday destinations are more popular with renters. Be sure to do your research on the rents and vacancy rates of the area you’re looking to buy in, in order to work out what your rental yield could be. 

Less maintenance required 

Units are a lot smaller than houses, which means they require less maintenance and upkeep. You don’t have to worry about keeping the lawn mowed or the hedges trimmed. Most maintenance issues, other than your plumbing or electrical mishap, will be taken care of by the strata committee. It offers you the perks of homeownership without the full responsibility of maintaining everything yourself. 

Easy access to amenities 

Apartment or units may come with community amenities depending on where you live. These amenities may include a pool, gym, parks, and additional security. This is great for those looking for extra convenience and who want to live close to lifestyle facilities. 

Cons of buying an apartment 

With these pros in mind, it’s also important to look at the other side of the story. There are cons to buying an apartment that should be considered before deciding whether it’s a good fit for you. 

Less space and privacy 

Apartments offer less space and privacy compared to a house. You’re likely going to have shared common areas such as the carpark, lifts, pool, gym, or any other amenities available to all residents.  

You’ll also have no space between you and your neighbours. You probably won’t have your own backyard (but you may have a balcony), and your walls will also be your neighbours' walls. Meaning, you may not have the same amount of privacy you’d have living in a house. 

Strata comes with fees 

When you live in an apartment with a strata scheme. You’ll need to pay some fees, which can range and are typically contingent on the services provided. For example, if you live in an apartment with an onsite manager, pool, gym, lifts, and ample gardens, you will likely need to pay higher strata fees than someone living in a small apartment complex with little to no amenities. 

Less freedom 

You may be restricted when you want to make changes to your apartment. If you plan on renovating or upgrading your new home, you’ll need to run this past the strata committee - and they will approve (or reject) your plans. You may not be able to make major changes to the structure of the apartment, especially if the complex’s plumbing or electricity is shared. 

Don’t typically increase in value as much as houses 

While it’s usually cheaper to buy an apartment, you’re not likely to see the same capital gains. This is because, generally speaking, the value of a home is in the land, and apartments are usually on much smaller blocks than houses. If you’re buying an apartment as an investment, it’s important to keep this in mind. 

Is it worth buying an apartment? 

The answer to this depends on your financial and property goals. The ideal home fits your needs. If you want to prioritise affordability and location, living in an apartment may be more suitable. Apartments offer a more accessible and less expensive alternative for homebuyers. 

However, if you want a spacious home and freedom to do as you please, an apartment may not fit your needs. A house, albeit more expensive, does offer fewer restrictions than living in an apartment or unit. 

Whether you’re buying an apartment or a house, you need a good home loan that offers competitive rates and flexible features that can help you own your home sooner. Learn more about your home loan options today! Get in touch with our friendly lending specialists or start your home finance journey by applying online. 

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