Buying a home is daunting, simply because of the marathon financial commitment you have to make. There are many points to consider such as: location, type of mortgage, insurance, maintenance and so on. Often people get caught up with the question about the right type of property – should you go for an apartment or a house?

Paying for your home

As a rule houses are more expensive than apartments – we’re not looking at exclusive penthouse suites here. What you can afford to buy will depend on how big a deposit you can save. Put simply, if you struggle to save set your sights on an apartment. You’ll get into the market quicker and it could be the stepping-stone to that backyard you’ve dreamed about. Whatever housing option you go for a mortgage will be part of the process, so be sure to protect your most valuable asset.

Renovations

If you have a grand vision for your home, which involve major renovations you probably want a house. Buying a house gives you ownership of a block of land and you more or less have the freedom to shape it as you wish. Want a fountain and private bar out the back? Go for it. With an apartment not only are you restricted by the structure but also strata title ownership structure. If it’s just interior design you’re interested in though, a unit will allow you to unleash your most creative desires. Provided you don’t knock down a wall.

Utilities

It’s obvious that houses are bigger, therefore it must cost more to heat, cool and light up. Construction plays a big part in home temperature. Apartments aren’t as well insulated as houses, so will let the air – cool or warm – out when you actually need it. It’s estimated an insulated house can decrease your power bills by 30%. Also, houses can have multiple stories meaning you can change rooms rather than switching on the air-con. Too hot up top? Head downstairs where the temperature will be cooler.

Stamp Duty

House or apartment, either way you’re going to get slugged with stamp duty. If you’re buying a house chances are it’s a family home, you’re only going to buy once but it will be a big purchase. You’ll have to pay a 3% duty on top of the sale price. As an apartment is a cheaper purchase owners may have the opportunity to invest in further units. The apartment investor will incur a 7% buyer’s stamp duty on their second property, and 10% on the third. This calculator can give you some concrete figures.

Buying from the developer

Many apartments (and some houses) make the initial purchase so simple you don’t even have to see the physical space. Buying off the plan means you’re buying before construction. The advantage is the price is locked in for a property that will hopefully have risen in value when you move in. You do need to do your research and not just run into the purchase. Buying a new construction means you’re more than likely getting a flash, contemporary design complete with new appliances and (hopefully) an energy efficient design.

NOTE

The links to the external publications on this page are provided purely for your information and educational purpose only. Tokio Marine Group does not guarantee the accuracy, completeness or suitability of the contents of these external publications.  We are not endorsing any of the external products or services which are stated in these external publications, and do not attempt or intend to influence the purchase or sale of any such products or services. It should not be implied that the products, services or activities published in these external publications may also be covered under our insurance policies. Should you require more information on our products, please refer to the respective product summary or contact us.