By Martin Bell
Recent figures from RPData inspired me to hit the keyboard again.
The capital growth figures for last year (median prices up to November 2009) show that Australia wide units showed better growth over the 12 months than houses.
Yes that’s right… in 2009, based on median prices, houses with the big land content did not grow in value as much as units with minimal land content.
It was close nationally, houses grew 9.9% last year and units 11.9%. In Brisbane units grew at double the rate of houses, in Darwin nearly 3 times the rate of houses, Sydney and Adelaide were the only cities where the growth on units and houses were similar.
Is this surprising? Not to me as I have said over and over again its not the property that grows in value it’s the position.
Generally to get really close to the CBD, the shops, the hospitals, the transport, the river or beach the land is so expensive you don’t get houses you get townhouses or units. We believe, as do many others , that to get capital growth long term you need to be close to all the infrastructure and houses generally don’t achieve that (Lily Rise 800mt from the new Coomera Town Centre is one exception).
Some people get hung up on land content or look at a house to be “better” than a townhouse or unit . Better how? In my experience the position of a house generally means slower growth, its harder to look after and for people who don’t like body corporate fees associated with units etc – you end up paying for the same things in houses. Body corporate fees include building insurance, a sinking fund for future maintenance etc – all costs you will eventually incur with houses anyway.
I recently had discussions with a friend over property types and I think often people miss the point. Bottom line is, as Nick says often, you don’t want a property you want an outcome. You want to use a strategy that has minimal risk, with minimal effect on your current lifestyle, and gives you access to the funds you need to retire comfortably (whatever that means to you) when the time comes.
I have over the past few years bought houses, units and townhouses. In most circumstances (never say never) I would not consider a house again. I am looking for an outcome (after 10 years I have pretty much achieved that) and I will consider whatever provides it for me with minimal risk and minimal effort from me (I am very lazy….ask my wife).
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Happy Investing,
Martin Bell
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