Apartments v detached houses: Which should you buy?

1 minute read

Apartments v detached houses: Which should you buy?

by Maja Garaca Djurdjevic 15 February 2021 1 minute read

The demand for larger properties is tipped to continue as Aussies turn their backs on apartment living out of both preference and convenience, as the COVID-19 pandemic leaves people looking for more personal space. 

Apartments v detached houses
February 15, 2021

One of the many trends the COVID-19 pandemic has borne is the demand for more space, which has boosted house rentals and their price growth levels.

Speaking on a recent episode of The Smart Property Investment Show, Dr Andrew Wilson, the chief economist at Archista, explained that the demand for larger properties is pushing down rental vacancy rates sharply while at the same time exerting upward price pressure on the middle ring and outer suburbs.

This growing trend, Dr Wilson opined, needs to be heeded by investors looking to make a smart buy.

“People are now saying, ‘Well, I need an extra room or an extra two rooms for an office’. So, they’re looking now to either rent or own or to move into a house rather than a unit. Now, this is putting pressure. And again, as we’ve mentioned, there is an underlying undersupply, particularly in houses in most capital city markets.

“So, I think the opportunities there are reflecting those lower vacancy rates and higher prices, in the middle ring and outer suburban detached houses. And I think that’s where the energy will come, or the drive will come from investors will be in those particular markets,” said Dr Wilson.

He advised investors looking towards the suburbs to firstly consider their yields while taking into account their vacancy rates, price growth levels, rental levels and their long-term economic prospects.

“I think the big drive from investors five years ago was apartments. But I think now we’re certainly looking more towards, I guess, the traditional detached house as an investment opportunity,” Dr Wilson explained. 

“I think those areas are going to be the targets for investors going forward. So, I think you just take that sort of scientific approach to it. There’s plenty of data that you don’t have to pay for that can lead you to create those type of simple models as a starting point, to determine where the best investments are,” he concluded.

For more advice on where to cast your gaze, listen to The Smart Property Investment Show.

Apartments v detached houses: Which should you buy?
Apartments v detached houses
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About the author

Maja Garaca Djurdjevic

Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of nestegg and Smart Property Investment. Email Maja at Read more

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