Detached Houses Worth Lot More Than Units
Imagine house values being more than 5 times the unit values. Takes some beating! This is the story of Centennial Park, Sydney. While such contrast is not a trend yet, the fact that combined capital city values show up a 28% difference between houses and units tells its own tale.
Houses versus units
Year to date, value of detached houses across capital cities has shot up by 10.7%, a good 1.3% higher than the hike in value of unit dwellings. This may set up a hiatus, a fast-expanding differential between house and unit prices.
Investors inclined towards houses
Government is keen to reverse this trend and for the purpose it has raised the number of approval of units to unprecedented levels. This is unlikely to change the scene though. Investors are traditionally bent towards buying houses because of the value they attach to the underneath land.
Land underneath the home
After all, when you buy a house you buy the land but when you buy an apartment you cannot of course own the strata complex or any percentage of ground it is built on. Now. land is always marked for appreciation given that its volume can no more increase. This tilts the investors towards buying detached houses.
Subdivision and dual occupancy
Moreover, you cannot possibly subdivide your unit apartment but can certainly build two houses by breaking down one, thus raising the potential of dual occupancy.
Naturally, in light of such ready benefits the fetish for houses is along the expected lines. I assume that the gap between houses and units will only widen from here. By the way, the change in strata complex regulations won’t help the matters any as it will drive crowd further away from the old strata units.
Which do you prefer and why?