Your first home: Choosing between a house or unit
If you are living or planning to move in Australia, should you purchase a condo or an actual house and lot? It’s a common financial and emotional issue faced by homebuyers, one without a simple one-size-fits-all answer. Although the difference between a house and condo goes beyond the absence of a yard; the decision about the type of home rests on both your finances and your lifestyle.
Here are a few key differences between the two types of properties to help you make an informed decision which is right for you.
The resale value. If you’re keen on finding a good long-term investment, a detached house is a winner here. Detached houses like the ones in Elliot Springs community by Lendlease stay in high demand in red hot real estate markets in Australia.
Detached houses are coveted because of supply and demand. In major urban centres, it’s easier to build upward for a condo building than to find vacant land to build new house and lots. With detached houses in short supply, they naturally see the highest price (value) appreciation long-term. Multiple offers are also more common.
Condos around you generally have the same value, so there’s no big way to make yours stand if you sell in the future. You won’t hear condo-flipping stories where an owner made off with a fortune.
Carrying costs. A home isn’t simply a one-time investment since there are a lot of ongoing expenses you should account for. When you purchase a house, you have to budget for utilities, including hydro, heating, and water, which varies monthly.
Condo budgeting can be a lot easier – generally, all you have to worry about are the condo fees, which remain the same every month; you’ll normally receive a notice once a year about any impending increase. Condo fees may be simpler, but that doesn’t mean they don’t matter. When looking to buy a condo unit, it’s vital to find out each condo fees and what’s included.
Insurance coverage. Home insurance is crucial whether you own a house and lot or condo unit. Your home is most likely your most valuable asset, and lenders won’t support your mortgage until you have an insurance coverage. Home insurance costs typically differ based on the type of property you buy.
Home insurance is usually higher for detached houses because houses face more weather-related risks. The good news is if you live in a condo, your fees most likely already cover damage caused by flooding and fire. Your insurance premiums should be a lot cheaper, as you’ll only need coverage for your contents.
Your lifestyle. Your choice shouldn’t just come down to your finances. It’s crucial to consider your lifestyle and if it will suit your desired property type. For instance, if you have children or planning to have soon, you may prefer a detached home with a yard. However, be prepared for the additional duties like mowing the lawn and shovelling the driveway. If you prefer a low-maintenance solution, you should consider condo as your first home.
The takeaway? Your call. There is no one-size-fits-all solution to see here. Think hard, plan right, and use both your head and heart when making the final decision. Best of luck!