The main benefit of buying a unit or apartment is obvious - their cheaper entry point into the market. But these days, it’s not only first-home buyers and retirees who are benefiting from the greater security, bigger community, and smaller floor plans they offer. And with the positive impacts of the recent federal budget, interest rates predicted to come down later this year or early 2025 - not to mention the ongoing appeal of tax deductions for investors - there’s no better time to think about buying property.

Apartment prices will grow steadily in 2024

There are many reasons buyers are looking at living and investing in apartments rather than the traditional Aussie home. The numbers speak for themselves. Houses are unaffordable for many and most experts predict that while house price growth will decrease in many areas this year, unit prices will grow steadily, especially in our cities.

“With the differential in price between units and houses at the highest level on record, and houses becoming more unaffordable for many, I can see continuing growth in family-friendly apartments in great neighbourhoods.” Michael Yardney | Property Update

Research is key

However, good research is key, because there are different considerations when buying an apartment. Location is an important factor when buying any property, but the fundamental design and amenities of an apartment - which doesn't have the structural flexibility of a house - can affect its future value and ongoing costs. Surprisingly, those high-rise city apartments with all the bells and whistles, for example, do not perform as well as low-rise with more basic amenities. 

Despite the recent surge in interest that we've noticed in our off-market units and apartments, we continue to advise our buyers to consider every aspect of their potential investment before signing a contract.

To provide you with an informed guide, we carried out our own research into the pros and cons of buying an apartment in 2024. The results surprised us.

The results of our deep dive into the pros and cons of buying an apartment this year surprised us

These are the pros:

1. Guaranteed price growth – As we mentioned above, experts like Core Logic are predicting strong results for units in 2024 and a boom in the luxury apartment market. Since COVID became less of a threat and migration returned, the apartment market has been reinvigorated. Many workers are returning to our cities, so well-designed and located apartments are proving a sound investment.
2. Security – Buying an apartment offers different forms of security to owners. It may be a haven for renters fed up with the unpredictability and competition of the rental market, first home buyers (desperate to leave home or share houses) and downsizers looking for a property with less maintenance. It also offers the safety of living in a community to those people living alone.
3. Bargains – Post-COVID, there are bargains to be had in certain coastal and regional areas including the NSW Central Coast, Sydney’s Northern Beaches and Victoria’s Mornington Peninsula.
4. Community living – We are learning more about the importance of connection for our health and many single buyers are drawn to the security and safety of community living. People are living longer, the divorce rate remains steady, and many young people are delaying marriage and children, so there are plenty of single buyers who value those closer connections.
5. The wide range of design and buying options – We know from our selection of off-market apartments how much they vary in design, whether they are for over-55s or younger families. With so much more interest in this area of the market, architects are designing apartment options to suit all age demographics.
6. Functional living – There’s no doubt that many of us – particularly Gen Z – want to simplify our lives and prioritise lifestyle over the “castle” that our parents prized. Gen Z are turning their backs on traditional objectives, and freedom from the maintenance of owning a house affords apartment owners more time to play and focus on what makes them happy.
7. "Greener” living – It’s not always possible, especially in a cost-of-living crisis, to do the right thing, but most of us want to help protect the environment if we can. Choosing to live in an apartment is one way to do that. “Greener” homes are the gold standard, and unlike single-level properties which use up more land and are expensive to maintain, the functionality and size of apartment blocks reduce our carbon footprint and are one solution to the housing crisis.
8. Cheaper and easier to maintain – In most cases, building maintenance is sustained by a sinking fund or capital works fund that is set up by the owners' corporation. Owner-occupiers pay into this annually, which takes the pressure off them to organise repairs and maintenance. Better insulation, a smaller floor plan, and energy efficiency also help save money.
9. Accessibility – Typically, apartment blocks are found in higher-density areas that are better serviced by local amenities, alleviating the need for private transport in many cases and facilitating access to public transport, shops, doctors etc.
10. Luxury Amenities - You've got a better chance of "living the dream" in an apartment complex. High-end finishes, high-tech Smart features, views, sports facilities, screening rooms and even golf simulators and on-site childcare can all become your reality. 

The cons are fewer but just as important to consider:

1. Annual sinking fund costs (strata management) are not to be scoffed at but they do save owners time and a lot of stress. Costs are higher in buildings that offer luxury amenities such as pools and gyms which will, inevitably, impact rental income. Usually, landlords set aside money – slush funds – to cover unforeseen costs of maintenance inside the property.
2. Less privacy – Though most owners embrace the benefits of community living, it can be a concern for others. Noise is something to consider, although most new apartment blocks have concrete walls and floors that help reduce it, and buildings will have their own rules and regulations to prevent issues from escalating.
3. Less control – Apartment owners have less control over decision-making but they still have a voice – usually via meetings with the body corporate or owners corporation (NSW). Personalisation can also be trickier in terms of structural renovations.
4. Too many investment and rental properties – For obvious reasons, owner-occupiers tend to look after their building better and issues with the fast turnover of holiday-makers who rent short-term rental properties are not uncommon. Most buildings are now creating regulations around this problem, but it makes sense to check them out, whether you intend to rent out your property as a landlord or avoid disturbances.

What do these results tell us?

Buyers are individuals with different priorities, but due to several recent changes in the market and general outlook on life, many are now considering the benefits of a different way of living: The prohibitive cost of entry into the market, shortage of stock, recent interest rate rises, environmental concerns, and our increasing desire for simpler, more functional living are all factors making them think twice about buying a house.

More buyers are considering apartment-living

“The desire to live on a good-sized block of land with a white picket fence and plenty of space with the family has changed as people are once again happy to trade big backyards in the outer areas for small courtyards or balconies as they search for a more convenient lifestyle.” Michael Yardney | Property Update

Whether your investment is an apartment or a house, it is always advisable to team up with people who have experience in your area and understand the vagaries of the market. With our BUYER ASSIST service, for example, you work with an experienced team with very clear objectives: to save you money, time and stress. Not only that, we offer a turnkey service from loans to energy advice. 

To discover our exciting portfolio of off-market apartments, sign up today for FREE to access our hub. Need more support, reach out to our team and they'll talk you through the many ways we can help you secure the perfect apartment.

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