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Should I buy a house or apartment?

Should I buy a house or apartment?

Thinking of buying a property? Wondering whether to buy a house or a unit? We look at how to weigh up the pros and cons.

Once upon a time, it seemed Australians had a similar dream. However these days, a property on a quarter-acre block isn’t everyone’s image of an ideal property.

While a house is still a home to the majority of Australians, the percentage of people living in separate houses fell from 86% in 1981 to 76% in 2011, according to the Australian Bureau of Statistics.

For many people today, an apartment may be a desirable option: they are generally more affordable than houses, and can offer lifestyle benefits too.

House versus apartment can be a dilemma for home hunters. Which one is right for you will depend on your financial circumstances, lifestyle and plans for the future.

Lifestyle implications

Living in an apartment means abiding by the rules of your owners’ corporation. By-laws may prohibit keeping pets or hanging out washing. You may also need approval before you make changes, such as installing new flooring or air-conditioning.

If you own a house, you can usually renovate as you wish, subject to council regulations. Apartment living offers ease of maintenance, and might allow you to live closer to transport, work, and the attractions of inner city suburbs.

Apartment blocks may also offer gyms, pools and other facilities, access to shared gardens, playgrounds, roof terraces and more.

Before deciding which style of property is best for you, think about your current lifestyle needs and your future plans - such as whether you would like to start a family, or if you have children who will soon be leaving home - before you make your decision.

Think ahead

When buying property, consider your ongoing costs. Houses tend to have higher maintenance costs, as everything on the property - including the garden - is the owner’s responsibility.

If you live in an apartment you will typically be responsible for most repairs and maintenance within your apartment, and you may pay an owners’ corporation fee to cover repairs and maintenance on ceilings, boundary walls, common areas and services.

This fee also covers building insurance (you should take out contents insurance separately), administration costs and a sinking fund for future works. Owners’ corporation fees vary depending on the number of facilities in the development.  

As with all property purchases, doing your due diligence is key. Our tools and calculators can help you plan your budget and work out how much you can borrow, what your repayments will be and more.

Getting a loan

The process of getting a home loan is very similar whether it’s for a house or an apartment. If you have a smaller deposit, Lender’s Mortgage Insurancecan help you buy your home sooner, allowing you to borrow in excess of 80% of the property’s value.

Speak to your Home Lending Specialist for specific advice on Lender’s Mortgage Insurance for the type of property you want to buy.

Financial implications

Apartments tend to be cheaper to buy than houses. In the three months to the end of July 2014, a house in an Australian capital city cost an average of $555,000, compared to the average apartment cost of $475,000, according to RP Data.

This means that choosing an apartment may save you money and make your mortgage repayments lower. Buying an apartment might also enable you to live in your desired suburb or street.

If you’re thinking of buying another property, our Home Lending Specialists can help.


This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Commonwealth Bank of Australia ABN 48 123 123 124.