Sometimes It Pays To Choose A Unit
Based on the median selling price, in June 2012 it was $25,000 cheaper to buy a unit than a house nationally and it was $53,000 cheaper in capital cities. In certain suburbs the differences are significantly greater.
The great Australian dream was always to purchase a house and raise a family on the block with the big backyard. Over the past 10 to 15 years the significant increase in home values has resulted in some reconsidering the financial practicality of ‘the dream’. Some are choosing to rent long-term rather than purchase while others are looking at alternative housing types such as units and townhomes.
As at June 2012, the difference between the median selling price of houses versus units was $25,000 at a national level and $53,000 across the combined capital cities.
The unit market is not just more affordable to enter than the detached housing market but units are growing in prevalence in inner city areas and along the transport spines of many large cities. These unit markets are typically located close to major working nodes and nearby to entertainment and dining facilities as well as being close to public transport amenity.
This week’s Property Pulse looks at the median ‘value’ of houses and units across suburbs nationally and determines the suburbs where you can make the greatest savings if you choose to purchase a unit rather than a house.
Many Sydney residents would like to live in Point Piper. Not only is it an exclusive enclave, but many of the homes have fantastic views of Sydney Harbour. The median house value at June 2012 was almost $7.4 million in comparison, the median unit value was around $1.7 million. Of course, many buyers still could not afford the $1.7 million price tag for a unit in the suburb however, it is significantly cheaper than buying a house. In fact, based on the median value a unit is almost $5.7 million more affordable in Point Piper than a house!
Across the other Sydney suburbs listed, the difference between house and unit values are more than $2.9 million across all regions listed. Although three of the five have a unit value of more than $1 million, in Woolwich the median unit is a much more affordable $529,000 and in Elizabeth Bay it is $526,000.
In Melbourne, the difference between house and unit values is greatest in Toorak at $2.2 million. Although each suburb listed has a unit value of more than $1 million, unit values across the five regions are significantly more affordable ranging from $475,000 in Malvern to $609,000 in Canterbury.
Across Queensland, Main Beach on the Gold Coast has the greatest differential between house and unit values at around $1.3 million. Outside of Main Beach, the remaining four suburbs with the greatest differential are all located in Brisbane with unit values all below $500,000 while house values are all in excess of $1 million.
In South Australia, all of the suburbs listed are within Adelaide and all have a median house value in excess of $1 million. Although house values are in excess of $1 million, across the five suburbs unit values are all below $550,000.
All of the suburbs listed for Western Australia are located in Perth and all are either adjacent to the Swan River or the coast. Each suburb has a median house value in excess of $1.5 million. Although many of the median unit values are quite high which is representative of a dominance of owner occupier unit offerings, in each instance they are more than $950,000 more affordable than houses.
Tasmanian house and unit values are significantly lower than those on mainland Australia and this is reflected by a narrower gap between house and unit values. Across those suburbs listed the value gap ranges from almost $190,000 to approximately $345,000.
In the Northern Territory, all of the suburbs listed are situated in Darwin. The high cost of homes in the city means the gap between house and unit prices is somewhat lower than other cities, ranging from $382,247 in Parap to $610,087 in Fannie Bay.
Finally, in Canberra the high cost of detached houses is reflected in the significant gap between house and unit values in those suburbs listed. Across most suburbs the median unit value is below $550,000 while the median house value across each suburb is in excess of $1 million with the gap ranging from $755,000 to $1.25 million.
The analysis highlights the sometimes significant difference in the value of detached houses as opposed to units. Of course there are a number of additional benefits associated with owning a home rather than a unit however, for price sensitive purchasers units often offer a significantly more affordable alternative. The unit market also affords buyers the opportunity to own property in some of the country’s most desirable suburbs at a substantially lower price point than purchasing a detached home.
SOURCE: RPData.Property Pulse by Cameron Kusher