Houses come with valuable land ownership which always appreciates.
All data shows that houses generally accrue greater long-term capital gain than units. As an example, the capital gain for Sydney over the past 25 years equates to a 7.6% annual growth rate for houses. For units, the annual growth rate was lower at 6.3%.
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The pros of houses:
Houses come with valuable land ownership which always appreciates, therefore both the land and the building itself attract capital gain.
Houses offer investors the ability to increase appeal by making structural changes or building a brand new home, to achieve higher rent and increase overall capital gain.
Regional areas are experiencing residential growth booms that benefit today’s investors.
The cons of houses:
Older houses may incur more costs for maintenance than units. However, building a new house requires minimal repairs and investors qualify for depreciation tax breaks.
Houses generally require bigger deposits than units. This is dependent on the location though, as regional houses are often cheaper than city units.
The key is to conduct thorough research, as there isn’t just one property market, and there are pros and cons with each choice. However, the data shows that houses deliver the best long-term returns when you select the right house and area.
This information is provided by DPN Pty Ltd ABN: 94 630 700 186 Australian Credit Licence 514759. DPN Finance Pty Ltd is an authorised credit representative 504129 and related entity of DPN. Credit for Dream Big 100% Offset and Work Smart 100% Offset is provided by Adelaide Bank a division of Bendigo and Adelaide Bank Ltd, ABN 11 068 049 178 and Australian Credit Licence 237879.