Units have seen a spike in first time buyer demand that may see units outperform houses in capital growth, according to RP Data head of research Tim Lawless.
During the first half of the past decade houses outperformed units due to rapidly rising land values, Mr Lawless explained.
“Unit values were also rising but not at the same rate as house values,” he said.
“But over the second half of the decade and more recently over the last couple of years unit values have been showing a greater rate of appreciation which I think shows a growing level of demand for first home buyers but also from young professionals who prefer to live in a more strategic location where their money goes a little further.”
Propertybuyer managing director Rich Harvey agreed with Mr Lawless, and said that most first time investors are aiming for units for affordability.
“In Sydney, most first time investors are going to be going for a unit, unless you’re buying in the outer ring. If you’re buying in the middle and inner rings of Sydney then you’re buying units, if you’re buying in the five kilometres or more from the CBD then you can start looking at houses,” Mr Harvey said.
He also advised that first time investors still consider looking for properties with high depreciation and a good location near shops, schools and transport.
Consideration should also be given to the different types of expenses involved with buying a unit or a house.
“If you buy a unit you have to factor in your strata fees and any kind of maintenance, whereas with a house you may have a larger maintenance bill,” he said.