Sometimes, units can be better investments than houses, provided, of course, that you buy the right one of the right type.
In particular, you might want to buy this type of unit:
- 2 bedroom, 1 bathroom, 1 parking space, with a balcony
- with owner-occupier appeal
- in a sought after area of very high demand
- walking distance to transport links for the city centre employment hubs
- walking distance to shops and entertainment
Also look for:
- where there are effective height restrictions on building new developments and constrained supply
- a quiet street with park space or water/beach nearby
- a boutique unit block of 4-12 units with scarcity value and high land value content
- low strata fees - no gyms, pools, lifts or 24 hour concierge! - and a decent sinking/admin fund
Perhaps also consider:
- potential to add capital value and increase rental income via a renovation
Obviously there are many more points beside only these to consider, but those are just a few of the key ones.
Read some more of my thoughts in this article on Property Update here.
One matter which I didn't note is that average household sizes can gently increase when unemployment rises, and we did see an element of this occurring in the period during and after the financial crisis.
The long term trend, however, is that average household sizes are likely to be locked down somewhere close to 2.5, which fits in with the trend towards medium-density living in Australia's capital cities.