\nIn today\u2019s show, Domain\u2019s Group senior economist Dr Andrew Wilson<\/b> gives us his view on the house vs unit debate
\n <\/p>\nTranscript:<\/h4>\n
Kevin<\/b>:\u00a0 A common question I\u2019m asked is \u201cWhat makes a better investment? Is it a unit or is it a house?\u201d Let\u2019s check in with Dr. Andrew Wilson, senior economist with the Domain Group, and get his thoughts on that.
\nGood morning, Andrew.
\nAndrew<\/b>:\u00a0 Good morning, Kevin. How are you?
\nKevin: <\/b>Well, thank you. What would you say in answer to that question?
\nAndrew:\u00a0 <\/b>Well, look, it\u2019s \u201cHow long is a piece of string?\u201d really, Kevin. It depends on the location. It depends on the price point, of course. Typically, units have a lower price point, are less expensive, I guess, more affordable than houses for an investor, and that typically means a higher yield.
\nThe disparity between prices is different to the disparity between the rents when you compare houses and units. That means typically you get a higher yield from an apartment than you would from a house. But at the other end, you tend to get lower vacancy rates on a house. There\u2019s more demand for houses. Lower vacancy rates, so higher occupancy rates, typically, compared to unit.
\nBut it does depend on where you\u2019re looking and the market. Of course, apartments do suit those investors who are looking for a lower entry point, and houses, of course, may suit those who are looking for investment property in their particular region if they\u2019re living in a middle- or an outer-ring <\/b>suburb. <\/b>Look, a lot of investors like to connect with the property that is in their local neighborhood or adjacent to their local neighborhood.
\nKevin:\u00a0 <\/b>Of course, it\u2019s always going to be a better investment in a unit if you\u2019re looking at an area that\u2019s predominantly servicing students. As an example, there are so many of those educational hubs around Australia where definitely, a unit probably is going to be a better investment. So it comes down to location and really what\u2019s what happening in that area, Andrew?
\nAndrew:\u00a0 <\/b>Absolutely, Kevin. That\u2019s a good point. There\u2019s certainly a market for student accommodation. There are now purpose-built developments that are designed specifically for students. I guess they\u2019re what we call the old fashioned bedsit type of apartment, which is basically a single room and then a bathroom, and they\u2019re designed for single-student accommodation.
\nA lot of developers have a one-shop stop type of project whereby they provide all the services, and all the particular on-costs that are involved with apartment living, and of course, they\u2019re designed for overseas students, as well.
\nThese can, for investors, become an interesting proposition because again, they can have a very low entry point in terms of the price of student accommodation units, and of course, they have higher yields.
\nKevin:\u00a0 <\/b>Yes. Of course, you have to think of things like vacancy, too. If you\u2019re going to be going into a highly residential area where you\u2019re going to be attracting a family, you may end up getting longer term tenancies too, anything up to a couple of years. So I guess there are a lot of factors that you have to weigh up, even looking at what type of investor you are, Andrew?
\nAndrew:\u00a0 <\/b>That\u2019s right, Kevin. I do believe that we\u2019re in for a period of higher levels of residential investor, particularly from moms and dads investors. I think residential investment will continue to produce yields well in excess of what we could get, for example, from bank deposits, and also I think that we still have that notion of security with that bricks-and-mortar style investment that\u2019s part of Australians\u2019 DNA to a large degree.
\nI think that will continue to drive residential property investment at higher levels, given also the tax breaks that are involved for residential investors. I think that this will be a growing trend in the market place for investment asset vehicles of this nature.
\nKevin:\u00a0 <\/b>Andrew, always good talking to you. Thank you so much for your time.
\nAndrew:<\/b>\u00a0 Thank you, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"
In today\u2019s show, Domain\u2019s Group senior economist Dr Andrew Wilson gives us his view on the house vs unit debate Transcript: Kevin:\u00a0 A common question I\u2019m asked is \u201cWhat makes a better investment? Is it a unit or is it a house?\u201d Let\u2019s…<\/p>\n","protected":false},"author":176692471,"featured_media":6723,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,11,13,17,22,25],"tags":[101],"class_list":["post-6722","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment","category-research-topic","category-sponsored-channels","tag-podcast"],"yoast_head":"\n