As much as it is important to get finance ready for the property, it is very important to choose a right type of property that suits your lifestyle. The common types of properties are houses, townhouses, villas, apartments, units. So what is the key difference and what are things home buyers should know before purchasing. We have put together the list of things that may assist you with the buying process. Please note that this is general information only and please do your own research in detail before committing to purchase.
House
Houses are a stand-alone free-standing dwelling on land. Houses are the most common type and highly desired type of property in Australia. Houses in Australia are usually registered under Torrens title, which is a single certificate of title for a specific plot of land.
One of the benefits of buying a house is that you have a flexibility to change things, renovate, improve the value of the house, knock down and build (subject to approval). Houses traditionally tend to have greater capital growth compared to units and apartments.
Semi-detached or Duplex
These are houses that are attached to each other with joining walls but not on common land. They are essentially two homes built with mirror image (most of them), meaning that if you buy both you can live in one and rent out the other. Duplexes and semi-detached homes are becoming very popular in Australia, especially in densely populated areas. Duplexes are more affordable than houses in the same area.
One of the cons of buying one half of the duplex is the proximity of the neighbors, you will be living very close to your immediate neighbors.
Townhouse/Villa
These residences share common walls like a semi-detached house, but don’t have common land. They share common walls and can be part of units or a bigger complex. The difference between a townhouse and a villa is a townhouse tends to be 2 storeys while a villa is always going to be on a single level. These types of properties share driveways and other common areas and normally have strata/body corporate fees.
These types of properties are generally more affordable than houses and duplexes in the same area. It is important to keep in mind that buying such properties, you will be a part of strata scheme which will incur regular strata fees that goes towards maintaining common areas, repairs etc.
Most of the changes/renovations except minor cosmetic changes requires permissions and approval.
Apartment/Unit
Buying an apartment/unit mostly come with a cheaper price than buying a house, duplexes. Highly dense locations are likely to have more apartments, units than the houses. Units typically requires less maintenance than houses. Some of the maintenance are covered by strata however you will need to pay regular strata fees that covers things like building maintenance, building insurance, cleaning and maintenance of common areas, shared utilities etc.
One of the cons of buying apartments/units is you are likely to see lower capital gains than you will see in houses. Key reason is for houses you own the land but apartments they are usually smaller blocks/space.
House and land package
A house and land package is where a block of land and the construction of a home is one process but they have two contracts. You will be purchasing a land from a developer and at the same time selecting builder to build a home.
Depending on the package, it can be great way to break into market, this is party because you will be paying stamp duty on only land price. Another pros is when you build a new home there are likely to be lower maintenance costs.
Key things to consider on house and land package is there may be limitation on inclusions, size of the house may not be what you really wanted and timing to build, the construction may get delayed that impacts your expenses as you will have to continue paying your current rent/mortgage plus repayment on the house and land loan.
Off the plan
Buying off the plan means buying a property that has not been built yet. Mostly you will be buying a property looking at plan, design and making decision based on imagination.
With most of the off the plan properties you can get into the property with 10% and you are buying a property in today’s price and if the value goes up you may already have equity built at the time of settlement.
Key things to consider when buying of the plan is when the property is complete if may turn out differently than what you expected, or if the building is not completed in time there may be increased costs or inconvenience.
Land
This one is self-explanatory as they are blocks of land that don’t already have a dwelling on it. Buying a land gives flexibility to construct the dream house you wish (subject to council approval).
Buying a land can cost you more if you currently renting or have another property as you will have to pay repayment on the land loan, so you will need to work out your budget if you are buying a land and then planning to build.
Building on your land can give you flexibility to choose any builder you want to and build a house that meets your needs. Many builders these days have display homes in many locations where you can view and choose home, so you can actually see and feel how the house will be post construction.
Acreage
An acreage is a property of at least one acre in size but often large. An acre is 4047 square metres and location is mostly in rural or outside metro areas.
Living on acreage will give you space, privacy, quality of air and also it is mostly peaceful and quiet. Buying a property farther away from city also can be more affordable.
Few things to consider buying acreage are limitation of entertainment options, commuting and if you are prepared to living away from amenities. Other safety factors to consider include if the locations is bush fire or flood prone and be prepared to such events in the area.
Speak to us
If you would like to discuss regarding property types and the loans that you can borrow for various type of properties please contact me directly and we can arrange a time to understand key factors.
