Townhouse or house?

What about a duplex?


Sounds like it might be a better compromise?

 

Can you provide the complete picture? As I am not spending weeks to do a complete picture of all the suburbs across Australia and how they have compared which still wouldn't give you a complete picture.

Yes the more supply reduced did reduce the cg I did point that out in my post and further gains will also be impacted with more stock coming online but it also happens with more land being released in the outer regions (e.g. Doreen) where there is a lot of undeveloped land this will effect future cg in the nearby suburbs too.

As a general rule (I will bold it and underline it as it isn't 100% accurate all the time), in terms of gains will be House on 1 acre > House on 1/2 acre > House on 1/4 Acre > House on 500 m2 > Townhouse on 300m2 > Unit. However the purchase/holding cost are roughly in that same order.

If you buy a brand new house, townhouse or unit then this will have the most deprecation which means the building is worth less than before (buildings depreciate) as you cannot improve on new.

Look at land in 2006 Melbourne population was ~3.3M and in 2016 is estimated to be 5.2M (2014 census 4.88M) so our population has grown by 60% (increased demand) but Melbourne hasn't been able to include more land we have just expanded outwards (except units). So more demand but same supply = increase price (land appreciates).

If all of a sudden Melbourne was uninhabitable then demand for land would plummet and so would the prices however that would also happen to unit prices to.

 

Personally I think over the long term we'll see the biggest gains in freestanding homes that are well located in each city. As Big Will said, land appreciates, buildings depreciate.

But for someone new to property investing buying a house and shelling out that much money might seem like a scary proposition, plus the rental yields aren't generally that strong when you compare to townhouses or units. So a compromise is to buy the well located townhouse. It has a bit of land and reasonably easy to manage. The downside is you have less freedom to do whatever you want to it, you can't just knock it down, subdivide it, sell to a developer etc. The upside is the better rental return and there's a lot less land value in the property if you want to hold several properties in one state - you won't hit a land tax threshold so easily. (But check out your strata!)

 

Ok guys,

I did a quick search on REIWA about most of the suburbs I'm interested in buying. Below is the list of them showing average house price vs unit price over the last 10 years:

1. Maylands, 4.1% vs 5.3%
2. Highgate, 3.8% vs 5.4%
3. Doubleview, 4.1% vs 4.6%
4. Glendalough, 3.8% vs 4.6%
5. Vic park, 5.3% vs 6.8%
6. Mt lawley, 3.6% vs 4.3%

Clearly in all of the above suburbs units performed better. There is a high chance I'll buy in one of those suburbs. Also i found similar statistics for many other suburbs i was previously considering. To me this definitely challenges the popular ograde phrase "buy a house because land appreciates and buildings depreciate".

I would highly appreciate comments from experienced investors on the forun.

 

Nobody can provide a complete picture. Nobody not even the likes of rp data etc. It comes down to supply and demand. There are way too many factors that go into both supply and demand, and forecast it out into the future which makes it even more unpredictable.
Best anyone can probably do is to do dd to get a 'good enough' and confident enough idea- and that also depends on the individual circumstances and willingness.

 

Honestly, my views are that stats like historical growth and median suburb prices are literally number 1 and 2 most overrated and irrelevant stats when doing DD on an investment purchase.

I think you're reading way too much into those two figures and need to start looking at comparable properties and price points instead.

 

Hahaha, well this didn't age well.

I ended up buying a home I wanted to move into and rented it out, but only for 1 year then we moved up here (Gold Coast).

Since then the house has increased in value dramatically and we bought an investment property. The investment was emotionless, we will never live in it or that area.

To be honest short of something stupid like a massive windfall, I think this house may be the last one I live in, I would be happy to spend the rest of my days here .

Just goes to show, life sometimes gets in the way of best laid plans but so long as you adapt and change your strategy accordingly everything will find a way of working out .