\nWe had a question sent in to us from Monica. Monica is simply asking whether or not houses make better investments than apartments?
\nIn today’s\u00a0show\u00a0Patrick Bright<\/b>,\u00a0from EPS Property Search, answers a question from Monica about whether houses make better investments than apartment.
\n <\/p>\nTranscript:<\/h4>\n
Kevin<\/b>:\u00a0 We had a question sent in to us from Monica. Thank you for this. Monica is simply asking whether or not houses make better investments than apartments?
\nI\u2019m going to ask that question of Patrick Bright, who is a buyer\u2019s agent from EPS Property Search. What\u2019s your advice to Monica?
\nPatrick<\/b>:\u00a0 It\u2019s a good question, Kevin. I would say that yes and no would be the answer there, and in certain circumstances \u2013 because it depends on the market that you\u2019re buying in, and it also depends on what the public and the buyers are demanding in those markets.
\nKevin<\/b>:\u00a0 Does it depend on not the type of market, but the<\/i> market \u2013 as in the suburb \u2013 as to what type of buyer or tenant you\u2019re going to be appealing to?
\nPatrick<\/b>:\u00a0 Yes, exactly. If you\u2019re looking in, say, a capital city, for instance \u2013 I know this because I know Sydney pretty well, I\u2019ve been working in it for over 15 years \u2013 the market in the inner ring over a third of the suburbs, the capital growth, for instance, is better with apartments than it is with houses. If you go back 30 years ago, that was not the case. The market has changed, and it\u2019s what the public and the demand is for, so you have got to have that aspect to it.
\nIf you go out of a capital city, the majority of the stock out there is housing on larger land blocks. You\u2019ll find \u2013 because I\u2019ve looked at it \u2013 that those will do better than the apartments in a regional area.
\nKevin<\/b>:\u00a0 Those inner-city suburbs you\u2019re talking about and some of the cap cities, we see they\u2019re changing them as they want more density into some of these. They\u2019re pulling down those houses and putting up apartment blocks. Obviously, that has contributed to that change as well, Patrick.
\nPatrick<\/b>:\u00a0 It would have had to contribute. Yes, for sure. It\u2019s the demand. It\u2019s what people want. They want to live closer in. If you\u2019ve traveled a bit and you\u2019ve seen places like, for instance, Hong Kong and Singapore, it\u2019s 90% apartments. People want the lock-and-leave lifestyle, they want views, they want all of that happening, and so if that\u2019s where the demand is, that\u2019s where the price pressure will be, and that\u2019s where the growth will be, and that\u2019s where the rents will be.
\nYou have to have an awareness of the market you\u2019re buying into, and where that market is going and where the future is of that market.
\nKevin<\/b>:\u00a0 Just to help Monica a little bit, is there a tipping point with the amount of stock? If you look at a particular suburb, for instance, and maybe it\u2019s got 40% units and 60% houses, but there tend to be more units coming up, would that be an indicator for you that maybe it\u2019s time to look at apartments, that that might be shifting a little bit?
\nPatrick<\/b>:\u00a0 Maybe. Again, I would look at it carefully. Let\u2019s pick on a suburb, for instance, Dee Why, which is on Sydney\u2019s northern beaches. Now, apartments in that market, about 85% of that market is apartments, and about 15% houses. In that market, houses do better than apartments because there are too many apartments for the demand that you really want to be there.
\nThere really isn\u2019t a blanket rule that you can put to it. You have to really study the market, the type of people who want to be in that market, the demographics of it now and where it\u2019s likely to go, and then make your decision based on that.
\nIs it like the Inner West? There are a lot of apartments being built in the Inner West, but still, terraces tend to outperform. Where you\u2019re going to generally get better performance with an apartment is in an area often with views and some uniquenesses about it, and so that\u2019s something you have to weigh in.
\nKevin<\/b>:\u00a0 Yes, history, of course, leaves great clues \u2013 doesn\u2019t it \u2013 if you go back and look at the history of an area and analyze it. Over what period should you go back, do you think? Is it good enough to go back, say, three to five years?
\nPatrick<\/b>:\u00a0 At least. Look, when I\u2019m buying a property, I look at it this way. I look back even 20, 30, 40, or 50 years, and I say, \u201cWhat was the prime real estate 30 or 40 years ago?\u201d It\u2019s generally the prime stuff today, and \u2013 guess what \u2013 it\u2019s probably going to be the prime stuff in the next 30 or 40 years. That\u2019s how I like to make my investment decision.
\nYes, history leaves clues, but you also have to factor in where the future is going. If the future is going towards that type of product \u2013 say, a more apartment-style product \u2013 and you\u2019re in the right location, you should do very well. Particularly, if you\u2019re in a land-locked location, and you have something unique about it \u2013 you have got water views \u2013 that sort of thing is very appealing to the market.
\nKevin<\/b>:\u00a0 Yes, very interesting, mate. Thank you, and that\u2019s certainly answered Monica\u2019s question. Once again, Monica, thank you very much for your question.
\nPatrick, to you, thank you for joining us today.
\nPatrick<\/b>:\u00a0 Pleasure, thanks, as always, Kevin.
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