unit and apartment, two different properties.
REIA class villas, townhouses & apartments under the units banner for the purposes of comparing house and unit median price growth.
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unit and apartment, two different properties.
Yep and that trend will continue and the outstripping will grow, over time as well.
The demographic is changing. I'm ready
A lot of you have suggested reading up on property investing, are there any particularly works which you have found to be helpful? Are there any seminal pieces in this field which would be necessary to read?
I would have thought location would be more important than house vs. apartment/unit? Sure, maybe houses go up more when you're comparing houses in the same suburb vs. apartments/units of the same suburb, but sometimes one is limited by $$ as you could be talking about $1M+ houses where you can get apartments for $400K, and so prefer to buy apartments in quality (predicted high growth) suburbs rather than houses in less quality (predicted lower growth) suburbs. I'll be facing this dilemma next year, whether to buy a unit where I think has potential for good capital growth as I've been priced out of the houses, or should I buy a house somewhere further out.
Aren't you confusing gross value and equity?
I would have thought location would be more important than house vs. apartment/unit? Sure, maybe houses go up more when you're comparing houses in the same suburb vs. apartments/units of the same suburb, but sometimes one is limited by $$ as you could be talking about $1M+ houses where you can get apartments for $400K, and so prefer to buy apartments in quality (predicted high growth) suburbs rather than houses in less quality (predicted lower growth) suburbs. I'll be facing this dilemma next year, whether to buy a unit where I think has potential for good capital growth as I've been priced out of the houses, or should I buy a house somewhere further out.
You generally expect a higher yield from units, so in theory CF should be a little better.
In >20yrs of investing in different types of property types in the same area, I don't buy the whole "quality real estate" line.
In boom times everything went up, but not all types at the same time.
Published "Predicted growth" was useless just as published median price values were way out most times.
anyway each to their own, but from personal experience I'll continue to pay more and buy houses in affordable areas. next step would be buying town house, or 'units' on chopped block - free standing, not apartment.
We were at a property seminar once, where the presenter up the front did the usual thing and asked everyone to hold their hand up if they owned investment property, and to keep their hand up as he counted up from one.
The well spoken nice elderly lady next to me put her hand down when he went past three.
There seemed to be a dramatic drop off when he reached four and five.
We eventually put our hand down, and yet there were people who were obviously going to have to leave their hand up for a while, by the way they were shuffling in their seat and bracing their arm with their other hand. He eventually called something like 40 or 42, and the second last hand went down.
The presenter yelled out "We have a winner !!" All of the crowd were mightily impressed with this one burly gentleman still with his arm up....."Can I ask you sir, how many properties do you own." The answer came back as 55. A large round of applause and a few OOH and AAHH's were muffled throughout the audience.
He was asked by the presenter to quickly describe his obviously weighty portfolio for the edification of the crowd, a real stand out performer.....it turned out he owned one group of dishevelled bed-sits with wino's and drunks and deadbeats as tenants, with the 55 'properties' being worth a grand total of about 2m, and his LVR was through the roof.
I quietly rolled my eyes in complete non-amazement.
The night did get better though, as the wife and I got on crackingly with the elderly lady sitting next to us. Turns out, the widow was left by her husband with not only the matrimonial home, but two large unencumbered office blocks in the middle of the Brisbane CBD, worth over 15m, generating clear nett rents of nearly 2m p.a.
This mild, quietly spoken lady had rents bigger than the hero of the day's entire asset base (including his large loans) standing up there making a turkey of himself.
Forevermore, we realised the folly of trying to financially measure someone by the number of 'properties' they supposedly own. It sounds mightily impressive though to say a big number, even if they are all dumps out in woop woop with horror non-paying low gross rent type tenants.
We got far more out of speaking to this lovely old lady than the main presentation itself.
rather than same suburb, whether that's an apartment in Elwood or a house in Cranbourne as most people wouldn't be looking at buying either a $400K apartment or a $1.2M house in Elwood for example. They'd simply say they have $400K for example, where should I spend it?
I have IP #1 for sale (again) and if it actually sells (a miracle)
Here's an interesting post from Dazz in the forum re: number of properties.
I'd definitely be questioning your assumption of houses outperforming units CRC. Even taking your St Kilda example, just because the past figures have shown those returns - doesn't mean units/apartments won't catch up again at some point.
If you were to assume the same growth rates for the next 10 years in St Kilda- houses would be almost double the prices of units in the area. Right now houses are around 70% more than units - is there a reason you think the gap will become wider and wider over time (which it has to if houses continue to outperform units)? Flash forward 20 yrs, you think houses will be $3.6M yet units will only be $1.5M? The gap would be 140% compared to the current 70%.
I dont assume anything, I go by fact. The fact is over the long term, houses generally grow more than units. 'Assuming' units will catch up is a guess.
Plus if I have a house, there is always potential to knock it down, and build units.
But as with anything, there are areas where units will do better, and houses will do worse, and visa versa.