Freestanding unit (villa?) vs house for our PPOR

Discussion in 'What to buy' started by martiancrater, 29th Mar, 2022.

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  1. martiancrater

    martiancrater Well-Known Member

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    Hi everyone, I'm a newbie from Melbourne, and fairly new to the property market too.

    My partner and I are both in our late 20s, and got our first PPOR 5 years ago (a small flat), and now upgrading to a bigger place with a bit of land. We don't plan to have kids, so we don't actually need anything more than a small 2-bedroom home.

    However, we can't seem to decide between getting a freestanding unit (I think they're called villas?), or pay a bit more for a house with more land in the same area.

    The unit would be cheaper, and in terms of lifestyle we don't need a big place. But on the other hand, would a bigger house with more land have better capital growth? Although I'm not sure how we'd make use of that growth if it's a PPOR, other than being able to use more of the equity, or sell/downgrade when we retire?

    Thanks in advance for any advice - we're quite new to property so sometimes it feels like we're wandering around blindly!
     
  2. Marg4000

    Marg4000 Well-Known Member

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    You will do much better in the long run with a house on your own block of land.

    No issues with body corporate or other restrictions on what you can and cannot do.

    And get 3 bedrooms if you can for much better resale appeal and value.
     
  3. The Y-man

    The Y-man Moderator Staff Member

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    Whereabouts? Is there a big diff in the prices?

    The Y-man
     
  4. The Y-man

    The Y-man Moderator Staff Member

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    Yeah, we call them units here, but people up north will get all confused, because they call apartments units.... :D

    The Y-man
     
  5. martiancrater

    martiancrater Well-Known Member

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    In terms of resale value, do you reckon there would be a significant difference between a freestanding unit with its own backyard, and a house? (assuming the land area is similar)

    We're looking around the "middle distance" parts of the north, east and south (ie. Heidelberg, Donvale, Mitcham, Caulfield etc - any suburbs near that rough "semi-circle"). Price-wise, we've noticed a $200-300k difference between the units and houses that we've seen.

    We've also found a few smaller freestanding units in more premium suburbs within our budget (ie. Surrey Hills, Bulleen, Malvern). We don't need a big house, but we're also concerned about whether there'd be much capital growth for such small properties in expensive suburbs? (compared to getting a bigger block of land further out)
     
  6. Shogun

    Shogun Well-Known Member

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    PPOR buy where you want to live in a property you like living in.

    I tend to look at villa/unit, townhouse (whatever term that means to you) and ask. Can I walk around it, how is it attached to another building, to the untrained eye, does it look possible to demolish and rebuild in the far future etc.
     
    Last edited: 29th Mar, 2022
  7. Marg4000

    Marg4000 Well-Known Member

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    For a PPOR I reckon it is more about lifestyle and finding a place you are happy to live in. Look at both options. You may be happier in an area where you can afford a villa but not a house.

    Don’t get too hung up on potential capital growth, it is at best a bit of an unknown. Some of our best capital gains came from apartments, two almost tripling in 10 years.
     
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  8. The Y-man

    The Y-man Moderator Staff Member

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    Yep there can be, as @Marg4000 alluded to, you can be restricted on modifying a unit (eg extending up) due to the OC.


    Yeah - I think you'll find the house-unit difference in these to be even bigger than $300k?


    I have units in Clayton South and Epping, which have grown ok.

    In many expy subs like the ones you mention, houses are out of reach of many anyway, so people who want to live there (like you) can drive up prices.

    Also keep in mind some townhouses don't even have a OC, so pretty much like a house in all respects except plot size.

    Also, if getting a unit, as others have said - aim for a 3BR if you can ESPECIALLY if it is in a good school zone so a family with kids can move in in the future (keeps vals up)

    The Y-man
     
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  9. The Y-man

    The Y-man Moderator Staff Member

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    In places like Donvy/E.Doncy you can end up paying more for a flash townhouse than an old clapped out house.

    The Y-man
     
  10. skater

    skater Well-Known Member

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    Since it's for a PPOR, don't get bogged down in potential CG etc. Nothing is certain, so look for something that YOU like, in an area YOU want to live in. As @The Y-man said, try to get a 3 bedder. You'd be surprised how you will need the added rooms as time goes on. We've retired, kids have long left. We don't have enough room with a 4 bedder by the time you count in a music room for Hubby, an office for me, a guest room, etc. Our home was much smaller when the kids were at home.
     
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  11. martiancrater

    martiancrater Well-Known Member

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    Yeah, I think potential capital growth is something we're getting hung up on. Our budget can get us a reasonable property in a location we want, but we keep thinking, "If we buy this sort of home in this particular suburb, will it go up in price in 10/20/30 years time, compared with that home in that suburb?"

    The other sort of property we've noticed lately are those subdivided ones where you've got 2 houses sharing one plot of land, but with their own driveways and no owners corp. It seems like they're a compromise between a house and a unit?
     
  12. The Y-man

    The Y-man Moderator Staff Member

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    Wrong question!! It should be "do I enjoy mowing the lawn every 2 weeks?".

    The Y-man
     
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  13. Shogun

    Shogun Well-Known Member

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    No!
     
  14. martiancrater

    martiancrater Well-Known Member

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    Not at all...I'm not much of a gardening person. A small 3x3 grassy area or even a brick courtyard for the occasional weekly outdoor lunch would more than suffice. And even then we usually do weekend brunches with Netflix...

    Good point! :D
     
  15. Tattler

    Tattler Well-Known Member

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    Get Jim to do the mowing for you as you watch your dirt appreciates in value over time.
     
  16. Tattler

    Tattler Well-Known Member

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    Definitely get a 3 bedder if you can, even though you don't think you need it now. 2 bedder townhouse/unit/villas are everywhere due to all the developers building them to maximise profits. So 3 bedder will hold value far better in the long term.
     
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  17. Gockie

    Gockie Life is good ☺️ Premium Member

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    Yep…. You can also have a boarder or Airbnb guests rent the third room… help pay down debt. A third bedroom gives better long term liveability.
     
  18. The Y-man

    The Y-man Moderator Staff Member

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    Yep - best $65 a fortnight I spend - and the guy does such a great edge on my lawn :D

    The Y-man
     
  19. martiancrater

    martiancrater Well-Known Member

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    Thanks for that advice! Do you reckon the size of the rooms matter much? We've found a few 3-bedders which don't seem much more expensive than 2-bedders, but the rooms are much smaller in comparison (in the 9sqm range).
     
  20. skater

    skater Well-Known Member

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    Only if it matters to you. When buying a PPOR, buy what you like. Don't worry about anything else.
     

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