In making this important decision the first consideration is Affordability. An apartment is generally more affordable then a house, assuming both are of similar age / condition, floor area and in comparable locations. This is mainly because a house has a land component while an apartment merely occupies a stratum or layer of space in the air!
Other important considerations include:
- Lifestyle - medium to high density apartment complexes are usually built within or close to activity hubs with shops, cafes, restaurants, public transport and other facilities within easy access. Modern apartment complexes usually feature at least a lap pool and a well-equipped gym. The more generous complexes could include a larger swimming pool, barbecue areas, meeting spaces, a communal garden, cafe / restaurant and even concierge service. All apartment complexes and even most lower density or boutique apartment buildings have a secured entrance and shared maintenance to common areas. On the other hand, if you love gardening, pets or a suburban lifestyle, a house may be for you. But you must be prepared for such time-consuming chores as garden maintenance, clearing gutters of leaves and sweeping the porch and driveway.
- Occupancy Costs - the largest additional cost in owning an apartment is its owners corporation (previously body corporate) charges. These charges cover the cost of maintaining common property and facilities. Modern apartment complexes featuring pools, spas, gyms and multiple lifts have high owners corporation charges. Older and smaller blocks usually have relatively lower charges. These costs should be included in the Section 32 (Disclosure Statement) for potential buyers to see. They can far outweigh council rates payable on a house.
- Convenience - you can be at the front door of your house within seconds of reaching home compared to going through corridors, passageways and waiting and taking a lift if you live in an apartment complex. Depending on the size of the complex, the floor your unit is on, the distance of your unit from the lift and waiting time for the lift, it could take many minutes to be at your front door. If you drive, there is also the extra time manoeuvring the multi-levels of the carpark and walking time from your parking lot to the lift or staircase. In a smaller or boutique apartment building you could avoid some of the above hurdles and get to your front door relatively sooner.
- Privacy - if you have no problem living close to neighbours and sharing common facilities, then apartment living could suit you. But if you prefer your own private space, are worried about noise, or do not want others to hear your karaoke singing, a house would be the better choice. If you have to settle for an apartment be sure to check the sound-proofing qualities of the building. You do not want to hear your neighbours conversations, arguments and the noise of pots and pans everyday!
- Potential to Add Value - If you own an apartment you cannot simply reconfigure your floor layout, paint another colour to your balcony or change your front door as your unit will be subject to the building's regulations. There is also no scope for increasing the size of your unit unlike a house. If you own a house you can renovate it, add a deck, a patio, a pool or even a granny flat (subject to Council approval). Or you could demolish it and rebuild a brand new house. Furthermore, if the land size and zoning permit you may be able to erect two or more strata units on the land (subject to Council approval).
- Rental Yield - Apartments generally have a higher rental yield compared to houses. But at any given time your unit may have to compete with other units for rent within the complex. This could affect the vacancy rate and subsequently the net rental yield of your unit.
- Growth Potential - Houses built on a good size land can appeal to a wider range of buyers: from owner occupiers to renovation specialists to builders and developers. While the building depreciates, the land by its very nature (such as its scarcity, irreplaceability and specific location) grows in value over time. An apartment within a medium to high density complex has the disadvantage of being identical to many other units. If there are several such units for sale at a given time within the complex, this will affect your unit's selling price.