One of the things you’re likely to think about before deciding on a home loan is what type of property you’d like to live in. From compact inner-city units to sprawling suburban homes, there are vast numbers on offer to suit your lifestyle in the New South Wales capital. However, the latest research from CoreLogic RP Data has shown that your ability to afford a home could be very different, depending on what category of property you choose.
It’s no secret that home prices have been rising in the Harbour City, but it seems that this rate has been more pronounced for detached property than for its high-density counterpart. Figures from SQM Research show that the median asking price for a house in Sydney has jumped 12.6 per cent over the past 12 months to May 26, while unit prices have increased at a slightly lower rate of 11.3 per cent.
Are apartments more affordable?
The CoreLogic report provides a round-up of the top ten suburbs across Australia that have the largest difference in price between houses and units. Sydney dominated the New South Wales contingent, with a number of suburbs across the city showing vast value gaps. For instance, the median value of a house in Centennial Park is a whopping 752 per cent more than apartments – in fact, while detached homes sit at well over $5 million, apartments in this sought-after area posted a much more reasonable $599,168.
This could be a handy guide for starting your search for a property. While buying a house might appeal more, there could be plenty of opportunities to purchase an apartment without breaking the bank. CoreLogic Senior Analyst Cameron Kusher pointed out that this is why many house hunters are choosing units.
“Although Australians still tend to prefer detached houses, units allow people to live in the areas that they want,” Mr Kusher said in a May 25 release.
It comes down to supply
The demand for units in Sydney has been gathering speed of late – and construction seems to be keeping pace. The latest building approval data from the Australian Bureau of Statistics reveals that the number multi-unit dwelling approvals jumped 5.3 per cent during March, while approvals for detached houses only rose 0.5 per cent.
In fact, earlier research from CoreLogic uncovered that the volume of units approved for construction in March outstripped the quantity of detached dwelling approvals for just the third time. Not only that, but 66.2 per cent of all approvals have been for units over the year to March in Sydney.
With such an impressive number of properties in the pipeline, it’s little wonder that apartments are looking like a more affordable option. For help finding the right mortgage, our team of home loan experts at Police Bank can lend a helping hand.