Are houses much better than villas?

Discussion in 'What to buy' started by martiancrater, 26th May, 2022.

Join Australia's most dynamic and respected property investment community
  1. martiancrater

    martiancrater Well-Known Member

    Joined:
    29th Mar, 2022
    Posts:
    58
    Location:
    Melbourne
    We've been looking around for a property in Melbourne (inner east) lately and a few agents have been spruiking the value of houses vs villas with strata. Is it just marketing or do houses have significantly higher % growth over time, even compared with a detached villa of a similar land size?

    Does this mean that over time, we'd be expecting house prices to be significantly higher than villas? Would this also mean the difference would get ridiculous eventually (ie. a 300sqm house at $5m vs a 300sqm villa at $2m), or would it equalize eventually?

    Sorry if it sounds like a dumb question, I'm still fairly new to this - it's always been something I've been curious about!
     
    martiancrater, 26th May, 2022
    #1
  2. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,502
    Location:
    Melbourne
    It's not a silly question. Get's asked a lot - and the stats aren't easy to figure out, because they lump apartments, townhouses, villas, whatever, all together....

    The main thing restricting major growth on villas is usually because you usually cannot knockdown/rebuild and/or extend.

    The Y-man
     
    The Y-man, 26th May, 2022
    #2
    datto and craigc like this.
  3. skater

    skater Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    10,259
    Location:
    Sydney? Gold Coast?
    With a house, you own the land, and as @The Y-man said, you can knock it down & build what you want, or subdivide if allowed.
     
    skater, 26th May, 2022
    #3
  4. aving1001

    aving1001 Well-Known Member

    Joined:
    24th Jul, 2018
    Posts:
    211
    Location:
    Sydney
    In case of house you are sole owner so allows potential for further investments. ( knockdown rebuild subdivision)
    Villas are group of dwelling controlled by a strata corporate body. Say if you have 10 villas under the complex you actually own 10% of shares.
     
    aving1001, 26th May, 2022
    #4
  5. martiancrater

    martiancrater Well-Known Member

    Joined:
    29th Mar, 2022
    Posts:
    58
    Location:
    Melbourne
    Becoming my pet peeve when searching! Sifting through all the apartments to find villas (especially when the apartments are referred to as units)
     
    martiancrater, 7th Jun, 2022
    #5
  6. TAJ

    TAJ Well-Known Member

    Joined:
    10th Oct, 2017
    Posts:
    1,214
    Location:
    Northern NSW
    Not all villas are under strata management. So modifications CAN be made.
     
    TAJ, 7th Jun, 2022
    #6
  7. Northy85

    Northy85 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    445
    Location:
    Brisbane
    When I was selling houses, the demand for lowset, 2/3 bed villas with a double lock up garage was huge. Most only have only one garage and the elderly downsizers wanted the extra storage space of a double garage. A little garden or courtyard area that is accessible from the kitchen is also a winner.
     
    Northy85, 7th Jun, 2022
    #7
    Marg4000 likes this.
  8. martiancrater

    martiancrater Well-Known Member

    Joined:
    29th Mar, 2022
    Posts:
    58
    Location:
    Melbourne
    I've found a lot of these bigger 2-3 bed villas with little gardens, which actually looks perfect for me. And they seem to be quite a lot cheaper than equivalent houses too!

    Is development potential (I assume that means adding on another room or level?) pretty much the main downside of villas, compared with houses? Or are people also a bit hesitant to pay much for villas in general, making the resale value lower?
     
    martiancrater, 7th Jun, 2022
    #8
  9. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,502
    Location:
    Melbourne
    It can also appeal to certain demographics of renters too (eg working couple, no time for a garden etc), and the rental yield can be quite good compared to houses due to the price point.

    The Y-man
     
    The Y-man, 7th Jun, 2022
    #9
    Hindsight-biased likes this.
  10. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    6,675
    Location:
    Mt Druuiitt
    Villas are more congested so you don’t get the privacy of a house. In a house you can walk out into the backyard in your jocks and water the garden. Not so easy if you own a villa on a 200 sq metre lot.

    People pay $$$ for that privilege.
     
    datto, 7th Jun, 2022
    #10
  11. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,502
    Location:
    Melbourne
    True - but a lot of so called "houses" in new devs are on ~400sqm so the conversations can be heard clearly next door in summer regardless.

    The Y-man
     
    The Y-man, 7th Jun, 2022
    #11
    Northy85, Marg4000 and datto like this.
  12. Baker

    Baker Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    1,003
    Location:
    I like bread
    Houses are 41.9% better than villas, which are 28.4% better than single story units, which are (the number of floors ^ 1.4)% better than apartments in multi-storey blocks.
     
    Baker, 8th Jun, 2022
    #12
    martiancrater, Dave Radelaide and Chris B like this.
  13. Dave Radelaide

    Dave Radelaide Well-Known Member

    Joined:
    17th Mar, 2021
    Posts:
    102
    Location:
    Adelaide
    I think you're *broadly* correct but perhaps a little more precision would help the poster:

    It's 41.87275%, 28.412835% and ^1.39989575


    You're welcome! ;)
     
    Dave Radelaide, 30th Jun, 2022
    #13
    martiancrater likes this.