Unit values outperforming detached houses across the nation

2.10.13With the rapid growth of capital city housing values across the nation, it has become apparent that units could offer the best avenue for people to enter the investment market in the future, according to the latest release from RP Data.

Overall, capital city home values have increased by 5.3 per cent over the last 12 months to August, while unit values have grown by only 3.2 per cent for the same period.

According to RP Data Senior Research Analyst Cameron Kusher, units are a fantastic choice for early investment, but not only because of their low price point.

“They are often most abundant within inner city areas where many people aspire to live and from an investment perspective they tend to offer better rental returns. The popularity of unit development is also rising as developers look to cater to growing housing demand,” wrote Cameron Kusher in a September 27 statement.

He went on to state that it’s possible many people were simply ignoring units and automatically looking into detached properties due to the low interest rates.

Furthermore, unit values have outperformed houses over the last five years. Unit value growth has reached 3.4 per cent over the last five years, whole house values have only increased by 2.9 per cent annually.

“From an investment perspective, the typical gross rental yield on a capital city unit is recorded at 4.8 per cent currently, compared to 4.1 per cent for capital city houses. Of course, inner city units typically offer gross rental yields which are much higher than this city-wide benchmark,” wrote Mr Lawless.

With the number of construction projects in Sydney set to grow in the near future, now could be the perfect time to consider apartments in the city as a potentially viable investment avenue for your property portfolio.

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