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For first home buyers, the decision whether to buy an apartment or a detached house could be the difference between real estate success and mortgage meltdown. Both options offer their fair share of positives and negatives, yet it's essential that you choose the right one depending on your budget, needs and goals.

Let's have a look at the benefits of each, to help you discover which is the right type of property for you.

Apartments may be a more affordable option for first home-buyers.Apartments may be a more affordable option for first home-buyers.


Units are generally more affordable than houses, meaning they may be the best option for first home-buyers struggling to afford ever-increasing property prices. In fact, across our biggest cities the average value of units is between $30,000 and $360,000 less than that of houses, according to CoreLogic RP Data.

Apartments may be cheaper to maintain, as your strata fees should cover all exterior and building maintenance, including plumbing, wiring and internet.

These savings do come with drawbacks, however. Most important of which is the fact that apartments are likely to experience less capital gains than detached houses – meaning you may make a smaller profit when reselling. In fact for the year ending July 31st, value growth in units has been smaller than houses, in all capital cities except Sydney and Hobart.

This is perhaps due to an oversupply of units, helped on (and perhaps worsened in future), by last year's record number of 80,000 apartment building approvals, according to a Reserve Bank report.

Across our biggest cities the average value of units is between $30,000 and $360,000 less than that of houses.


Owning a detached home with a yard for the dog to play in and spare rooms for the in-laws to stay in may be the dream of many aspiring homeowners.

While the lifestyle benefits of a larger property are often what buyers focus on, the increased likelihood of capital gains are certainly worthy of consideration.

As an example let's look closer at value increases in detached homes throughout suburbs in Adelaide. There are at least 20 suburbs that experienced median value increases of 10 per cent or more for houses, during the year ending winter 2015 according to an NAB report.

On the other hand only three suburbs throughout Adelaide experienced median value gains for units of above 10 per cent.

In most areas this is the case, indicating that provided you buy smartly and can afford to service your home loan – purchasing a detached home could be your first step towards profiting from property.

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