Houses or units - $6 million question

From: Ian Findlay

Hi all,

Debate time!
There is conflicting advice out there whether its "better" to buy houses with land or to buy units.

Stated advantages and disadvantages are:

Advantages of house/land over units.
1. Land appreciates more i.e. capital growth
2. Limited land unlike units which can get taller and taller.
3. Much more potential for renovation/ redevelopment or subdividing.
4. Land retains core value i.e. no matter what happens to the condition of the house the land has higher core value than a run down unit would have.
5. People only buy units because they can't afford house/land so poorer tenants etc.

Disadvantages of house/land over units
1. House & land generally more expensive to buy than units
2. House/land generally needs more upkeep.
3. Generally less rental return on house per $ spent.
4. People want easy living i.e. no grass to mow etc so prefer units.
5. People can generally live closer to cities with units.

Any more advantages or disadvantages?

What do folks think?

Last edited by a moderator:


Reply: 1
From: Seagull .

Blocks of units get 'tired' looking over time and that is not easy to remedy. With a house one can always do something to improve the external appearance. This is worth thinking about. Seagull
Last edited by a moderator:
Reply: 2
From: Rolf Latham

Hi Ian

Once again I will throw my 2 bobs worth in where I usually do not venture.

Emotions and rare anomalis aside, and speaking only of the Sydney Market.

You need to look at overall return. This is rent, cap growth and yes heaven forbid tax breaks.

In most areas of Sydney, houses with land content will outperform units 1.5 to 1 in total returm. Why, I have my suspicions but someone esle can have a go at those.

There are areas where limited supply exists where units will match or even slightly outstrip "houses".Areas such as Waverly, Manly, Neutral Bay etc etc.


Last edited by a moderator:


Reply: 2.1
From: Donna Larcos

I recently bought an off-the-plan unit in a
strata of 60 units over 2 blocks. Normally,
I would not buy into something this big
but the benefit of this one was the the 43
sq m 1 br unit had an 11 sq m north
facing terrace hanging off the front and a
large rear courtyard. There are only four
with this floorplan in the complex and only
about 15 have the rear yard. This is all on
title. I think you can do well with units if
you look for ones in smaller buildings
with variety in the floorplan and some
feature which sets it apart from others in
the area such as large terraces,
courtyards, panoramic views etc. The
other alternative is to buy small blocks of
four where you can control the
appearance of the building and refurbish
it ever twenty years without having to do
fifteen rounds in the body corporate.

Rolf - do terraces and yards on title get
taken into account for "size of unit,
minimum 41 squ metres" or would my
unit only be considered as the 43 sq
Last edited by a moderator:
Reply: 2.1.1
From: Rolf Latham

Hi Donna

Obviously not a normal M******n unit, so there would be a 50 50 bet that you would be in the + 50sqm rule.

The reason the banks do not like the little ones as a general rule is that when the marhet goes a little soft they are generally ill liquid. Not the case with "garden units"


Last edited by a moderator:
Reply: 2.1.2
From: Owen .

I did similar recently. I had a choice between 2 identical units one above the other. Both were 56 m2 but the up stairs one only have a very small balcony - maybe 2x1.5m. The one I bought has a 34 m2 courtyard with a gas BBQ bayonet and tree in a huge terracotta pot. There is no external access to this courtyard either so it is really secure. The unit was also $1500 cheaper than the other one.

Both properties came up for rent recently (same rent) and my tenants chose my place specifically because of the courtyard. In a 1br unit it gives them the space to store things like bikes or a surfboard and somewhere to entertain. Some private space, not just the common area.
Last edited by a moderator:


From: Robert Longmore

i also noticed when looking at a inner city apartment, that the Car park space was also included in the total area of the unit.
Last edited by a moderator: