WTF - is buying an apartment a total rip-off?

I'm 28, single and looking to find my own place after saving for about a year. This is my first ever time in the real-estate market (perfect time apparently) so I don't know much, but after browsing thru prices for the last couple of days I'm disgusted. Apartments cost virtually the same as a full-sized home! How is that even possible?

I'm not talking about the city. I'm from Western Sydney and plan on staying there. A decent, semi-modern apartment runs at least $480k in Bonnyrigg. Parramatta and Baulkham Hills the price rises another $100k on top for just a single bedroom place, and that's not even counting the strata fees which can be around $400 a month! Honestly for all that money I can just buy myself my own private 3-bedroom mansion (by comparison) and enjoy the luxury of a backyard too. What's going on?

I was kind of set on an apartment because I like living small in a populated area but not at that price. Would appreciate any insight.

Comments

    • with the population growing, the tide will shift one day.

      That's true, but so are the cemeteries as well..
      Also please note it takes quite a while for population growth in this year, to reflect in the housing market if everything else is held equal.
      How long does it take for baby Joe Smith born today, to be capable of buying a property?
      Maybe not even baby Joe Smith, how about teenage John Citizen just undergoing highschool?

      Are you going to HODL, pay interest expense for that long, in the hopes that your property will have enough capital gains in the future, to be realised (and taxed)?

      You better be damn sure there's enough baby Joe Smiths that would want your property in the future.

      • +1

        That's true, but so are the cemeteries as well..

        A bit off topic but I'm personally considering having my body composted when I die. I think it's kind of silly to populate the ground with dead bodies to be honest. Although I have read that sometimes people will request to be buried "on top" of their partner when they die, so it takes less horizontal space as opposed to vertical space.

  • +10

    Anyone in the real-estate industry will always tell you now is the "perfect time" to jump in.
    They would have said the same a year, 5 years, 10 years ago.
    Thing is, they're all correct insofar as you would have some capital growth had you bought at virtually any time in the past.
    Perhaps right now we're in a brief "cooling off" period; but that would only really affect someone who bought 6 months ago to flip in the ultra-short term.

    I'm not advising you against it, like I said they're all right in a way; the hype-mongers just irk me.

    • +2

      Anyone in any investment industry will tell you now is the "perfect time" to invest. 'Now' being at any point in time you ask them.

      They are just salespeople after your money. DYOR and do what works for you instead of following the so called "experts".

  • -3

    Why has this been posted on Ozbargain?
    OP is not seeking assistance or advise.
    Just venting his anger.
    Sorry but OB is not the place to vent your anger about the world.

    • +14

      Why have you commented on this Ozbargain thread?
      You are not seeking assistance or advise.
      Just venting your anger.
      Sorry but OB is not the place to vent your anger about the world.

      • +14

        Why can't either of you spell "advice"?

        • +5

          If they wanted your advise they would have asked you. :-)

        • +4

          I can, I just didn't notice when I copy/pasted :)

        • Maybe they're from overseas. I know Singaporeans who have spelt "advice" as "advise".

  • According to recent press reports, Sydney is about to hit a massive slide in property prices, possibly up to 40% devaluation.
    Maybe now is not a good time to buy.

    • +6

      Dont believe the press. They have NO IDEA
      Its all about selling newspapers, not property

      • -2

        The press only report what they hear from their sources.

        • They can just follow US media's lead and make something up and say it's from a trusted anonymous source.

          • +1

            @Rysta: You can just use your brain and scrutinise each report on its merits.

      • It sounds like you know SOME IDEA.
        Can you share yours please?

    • Stand in line. There are alot more people with alot more money than you waiting for the opportunity to pounce.

      • aussies in general are already heavily in debt with very little savings. there will be some exceptions, but there are very few people left with money waiting for the opportunity to pounce. everyone interested in real estate has already bought and is leveraged up to their eyeballs.

  • +5

    Who in their right mind would prefer an apartment over a house?! That is just crazy talk.

    • +5

      No lawn to mow, gutters to clean, etc. And it's cheaper, and probably more centrally located. They have definite benefits.

      • You hit the nail on the head.
        Minimal maintenance issues.
        All taken care of by the Owners Corp (hopefully)

        • +6

          At massive cost to the individual.

        • At higher cost than if you had to do maintanence on a house.

      • +4

        I don't live in an apartment, but my friend who does tells me this.

        You can hear your neighbours farts through the thin common walls. Hear the tinkle and gushing noises from your upstairs neighbour's toilet. Noise can be traced to your own bathroom that shares a common poo shoot plumbing, you hope to god that there aren't blockages that cause crap to explode out of your toilet bowl. You open your balcony door to let the cool breeze in after a hot day, only to fill your living room with second hand smoke from your chain smoking neighbour below you. You hang your washing to dry on the balcony only to see black dust from the main road settling on the washing.

        • +4

          Some buildings actually have quite good soundproofing. Most of these problems can happen in freestanding houses too.

          • @abb: I'm sure new apartments wouldn't have this issue but he lives in an older apartment.

            • +4

              @zealmax: New apartments have this issue. Builders are skimping on quality to maximise profit

          • +1

            @abb: I'm pretty sure you can't hear your neighbors Farts in a free standing house lol

      • Most importantly, no bins to take out every week :D

    • +1

      Empty nesters. Depending on how you look at it more security too.

    • +8

      You get to hear your neighbours have sex. Saves internet costs. Ditto for hearing your neighbour's petty arguments. Free entertainment.

      • +1

        I have horrible downstairs neighbours who listen to talking radio full blast all night because it helps them sleep. I must admit the sound of then screaming at each other is music to my ears.

        I hope whatever domestic violence results one day will see one in hospital and the other prison so I can sleep without earplugs.

        • You optimist

    • brb no garden, brb nothing to clean, brb centrally located means less driving and time wasted

    • +2

      I recently moved from a house to an apartment for 3 months when I lived overseas.

      End of week 1 "Wow, apartments are great, I have everything I need"

      End of week 2 "Omg, this sux, I need some extra rooms so I can hide from my 3 children".

      • +1

        End of week 3: Kids are now at camp, I can finally have some ti…

        End of week 4: …nevermind.

    • +2

      I think it really depends on your age and family situation…

      I'm single and young professional, I really don't want to spend too much time/money on fixing my place and mow the lawn over the weekend haha..

  • +1

    I was kind of set on an apartment because I like living small in a populated area

    I think that is your answer to the question.

    People spend money on what they like, which happens to be living small in a populated area.

  • Oh and OP? Might want to have a read of this if you're considering buying right now:

    https://www.abc.net.au/news/2019-02-21/cladding-crisis-sprea…

    Thousands more properties could now be caught up in Australia's cladding crisis, after authorities issued an alert warning against the use of another nine types of cladding.

    • +1

      Brick has always been best !

  • +3

    I nearly purchased an apartment for my first property. It was an investment about 6 years ago. The best thing I did was purchase a house and not a unit.

    Think of the future,it may change. Wife, kids in a single bedroom? Obviously, it all comes to what you can afford.

  • +4

    Hold the presses! Breaking news - Sydney real estate is expensive!!

  • Populate or perish, what bullshit that was.

  • +5

    Please do tell me where I can get a mansion for 480k in Sydney? OP you're a joker

    Apartment benefits
    - location ( 3 major supermarkets in walking distance )
    - less cleaning and maintenance (zero)
    - secure parking which you could lend out if you don't have a car ( extra money in the bank )
    - less driving ( i fill my car up every 3 weeks now sometimes 4) whereas when I lived in a house I had to do this every week or every 5 days
    - better views ( wake up to uninterrupted ocean views or city views if that's what you're into)
    - can turn it into a holiday rental in the future and make 500 - 600 a week easily ( airbnb or give it to caretaker of the buidling to do that for you)

    house I bought in 1999 has only gone up 33k a year, worth around 900k now however maintenance and upkeep is a big thing. Will hold it until it hits 1mil before I unload it.

    You have to be patient and do more research.

    • +4

      Apartment disadvantages:

      -Strata Fees: they can a be a lot depending on the features your block has.
      -Having to book event rooms to have guests when your apartment isn't big enough.
      -Hearing the bloke upstairs aim deep in the toilet bowl.
      -Hearing the neighbours get it on.
      -Less privacy.
      -Crazy neighbours that you, unfortunately, need to deal with because they're part of the body corporate.

      Don't get me wrong, I've lived in apartments and see the advantages but there definitely cons to balance the pros.

      • And no lawn with dirt for your kids to eat greatly increases their chances of having allergies.

      • +1

        -Hearing the bloke upstairs aim deep in the toilet bowl.

        lol this is ridiculous….maybe in an aprtment that's 100 yrs old..

        -Crazy neighbours that you, unfortunately, need to deal with because they're part of the body corporate.

        This is true though but same as living in a house right..nosy neighbours

        • +2

          -lol this is ridiculous….maybe in an aprtment that's 100 yrs old..

          Truly, back in 2007, I shared a newly built apartment with a Friend. I could hear the bloke upstairs pissing and playing V8 Supercars til the early hours of the morning and the couple in the complex across from ours going at it. Everyone within cooee heard that.. lol

          -This is true though but same as living in a house right..nosy neighbours

          Well, it depends. There's more space between houses in most situations, You have your own land that no one can tell you how to use it. They don't have any leverage with the body corporate etc.

    • I love the security aspect of apartment building. I don't need to be paranoid every sound outside and constantly thinking about weaknesses in security.

  • +9

    buy a house then if its the same price. good deal. thanks for posting

  • I bought my apartment last year. On top of 2k a quarter strata fee's we find the roof needs urgent repair. 10k to be paid in a year. Beware of special Levy's they can sting as well may not be something you have prepared for or even think about

    • I thought strata pays for the roof?

      • +2

        yeah, money comes from owners

      • +2

        The Strata Funds (our funds) can only spend what we have budgeted for. In this case the works fund didn't budget for an urgent roof repair.

        • Hmmm that's weird.. My unit needed roof and aircon fix.. It's all covered.

          • +2

            @sauce2k: Special Levys are pretty common. The Strata (us) cannot pull money out of thin air. If we haven't budgeted for an emergency then it can only come out of our back pockets.

            Let me add, I have since found our funds are low because the funds have been mismanaged before I bought in.

            • @burns13: Argh fair enough. We had a special levy like 6k for repainting the blocks. Luckily our funds have been managed properly so we pretty good for now. All the best!

          • +2

            @sauce2k: It all depends on how much sinking funds your strata has. Anything short has t be shouldered by the owners.

            Better getting a house.

  • +1

    Thanks for the insight peoples (even the negative ones).

    Thinking further, I have really bad asthma (can't even have carpet at home), so living in a dense city or suburb has always worried me. I'm thinking if I lived higher up (10+ floors) this might be slightly rectified. But to add my inner sense of germaphobia on top of that, I really don't think I could make it in an apartment after seeing some of the comments here. Might have to do some more personal thinking, although I'm starting to sway a lot more towards a house.

    • +9

      ok.

    • +1

      Make sure it is a brand new house that’s been installed by contractors wearing gloves and face masks. Otherwise there will be germs left everywhere. And make sure you live no less than 500m from the nearest human to avoid airborne disease. Should be able to afford that for $500K in inner Sydney.

    • +4

      What you need is a good GP and a solid Asthma Management Plan.

      Not an apartment 10 floors up.

  • Don't buy an apartment. For a lot of money, you are buying a lot of air. You don't own the ceiling, walls or floor; just a little bit of land. When it comes to sell, there are heaps more being built with the latest and greatest.

  • Wait another 2 years and you should be able to purchase them at least 30% cheaper.

  • -1

    SORRY TO STATE THE OBVIOUS HERE… I'D WAIT UNTIL THE NUCLEAR WORLD WAR.. DON'T STRESS… IT'S COMING :)

    • People have to wait for 5 years and after that 5 years they have to wait another 5 years to await another event to happen. 😂 that way decades will pass and still speculating whether to buy now or wait another 5 years.

  • -3

    That's not expensive at all. Grab it while you can.
    My loaded friend from China, after attending some luxury homes in Watson's Bay, cried out that Sydney houses are soooo cheap! If there is some policy change to allow more foreigners to enter Australian real estate market, you may need to pay multiple on current prices. Not a joke.

    • Overseas punters, it is like us going to Thailand thinking it is cheap but paying tourist prices. Lucky there is enough suckers to keep this going for now.

    • +1

      There's nothing stopping foreigners from purchasing property in Australia already. All they require is FIRB approval, which is extremely easy to get. The Chinese won't be getting back into the market anytime soon though - the Chinese Communist Party (CCP) has clamped down on people trying to wash dirty money through foreign property.

  • -4

    It's very cheap to buy housing now with the Aussie $ way down, and the interest rates on their way down. We have no land tax on PPOR. Save up some deposit.
    Sydney is a very cosmopolitan modern city, and compared to what you are offered across the world, Sydney prices are cheap.

    • Compared to Shanghai or HK, Yes it looks cheaper.
      Look at the PIR (price Income Ratio). It's the World class.

  • Buy the house unit block are life style think i live in it easy solar on roof

  • OPs commentary is just full of generalisations that doesn't mean anything. There are apartments with high strata and ones that have reasonable strata. You're saying apartments are expensive but the comparison you make are exaggerated.
    That's the price determined by the market and if you feel they're overpriced then look for something cheaper.

  • I'm from Western Sydney and plan on staying there

    That's your problem. Previous generations before you would move to be able to have a house they can own. There are plenty of places in Australia where you can buy property. I'm sure you could find a suitable job to relocate to in a more affordable area to your budget. Buying an apartment is not a rip off unless you bought into Opal Tower.

    • +1

      There are plenty of places in Australia where you can buy property. I'm sure you could find a suitable job to relocate to in a more affordable area to your budget.

      It's kind of scary that people have to consider moving interstate to buy property now.

      • Why is it scary?

        Things change, people adapt.

        • +2

          I don't disagree that people can adapt to changing times, I mean that's why we're all here basically, but it's extremely inconvenient to have to consider moving to another state so you can buy a house. Who wants to pick up their entire life, leave their friends and family because they're priced out? That's why I said it was scary, because you might have to essentially leave everything behind just to buy a property (in actuality I'm referring to a house due to cheaper unit/apartment prices).

          • +1

            @Ghost47: Property ownership isn't a necessity. As with most things in life, it's a trade-off. Rent somewhere familiar, own somewhere else.

            • @HighAndDry: Hmm that's an interesting idea actually. I always considered it to be own or rent, never considered the idea of owning somewhere different to where you rent (e.g. interstate).

          • @Ghost47: People do that all the time to improve their perceived life quality.

            Move for a better job, move to a better country, move to escape war, move to be with family.

            If one thinks that moving just to buy a house is a step up in perceived life quality, there is nothing scary about that.

            But if one does moves to buy a house but feels that it is a step down in perceived life quality. That person is stupid.

            At some point it is just an internal conflict over things that people want just as badly. Something has got to give to achieve a thing. We're competing against 7.5 billion human beings as autonomous as ourselves. We can't have every single thing we want.

            • @[Deactivated]: I wouldn't compare moving interstate to buy a house being in the same realm as moving country to escape war or moving to a better country to be honest. Even if you do compare those events, different people feel different emotions. You may not be scared about doing that sort of thing, but there are other people who may be scared about it.

              I also wouldn't say I'm competing against every single human being on the planet. I mean yes there are people I compete with jobs for example, but I doubt that I have to worry about some old grandmother in Eastern Europe or a young child in Africa taking the job that I'm going after.

              • @Ghost47: I'm not comparing them.

                I'm saying it is just people moving to improve their life quality. I'm not speaking about the moral necessity, impetus or motivation. You weigh up the costs and benefits then take action.

                Thats the thing. You're underestimating that capability of that old grandmother in Eastern Eu or that child in Africa. That African child might develop a technology that reduces the labour requirements of your field. That grandmother might be rich enough to buy something out from under you. That is why most of the developed world is facing problems with competitiveness.

                • @[Deactivated]: Okay, that's fair enough you think that. I don't quite agree with your sentiments because I think they're extreme cases.

  • I feel your pain !! Housing has always been expensive, my folks thought so too when they got their first place for 25000 (yes dad now in his 80's) Would it help to think in terms of how much rent you are paying / what stage of life are you in ? Are you able to move to cheaper area or state even ?

    • Would love to move to the bush somewhere, but no jobs. I spent a few weeks in Mudgee once - best time of my life. Nice community with mixed age groups, beautiful scenery, peace and quiet, laid-back people without a worry. I'd buy a house there instantly since they're cheap but where would I work? Even if you could land a job somewhere nearby the money would be tight which would make the cheap property you bought actually quite pricey compared to your wages.

  • You could buy a cheaper house that is smaller and further from where you work. You can always decorate it to look modern later. And learn to enjoy the extended alone time in your commute, listen to some albums or audiobooks or something.

  • I've recently been helping a friend look for a unit and Merrylands is 2 bed around $415k, dropping all the time.

    Westmead gets you a nice big one bedder for $415k

    Maybe it's your taste that's keeping it large

  • +8

    Wow, there are pros and cons to both apartment or house living;

    Lived in an apartment for the last ten years (until I moved out 9 months ago); awesome block, secure building, a few minutes walk and you are right in the city, shops in any direction you can think of - if you run out of milk, well two minutes away and there's a shopping centre. Walking to/from work, shops, restaurants, cafes, bars, nightclubs etc. You will definitely spend a lot of money if you love socialising or just going out, because everything is so accessible. I don't worry about taxis refusing to take me home after a big night out nor do I worry about Ubers calling before hand to see if my trip is long enough to make it worthwhile - I just walk home ;)

    I travel a lot (or even just going out for the day to work etc) so the convenience of being able to just close the door behind you and not need to worry if your apartment will be broken into, or even worry about little things like your mailbox.

    Today I live in a house and I worry if all my doors are locked, if the windows are closed etc. I make sure the front gate is even closed. I have to maintain the front yard and the back. Now I jump on the bus or light rail into the city - and even though I am only 4.5kms from the city - the 20 minute wait for a bus is like a lonnnnnnnng time given that not too long ago, I would have been home/city/wherever already.

    So even though I have my own house, there is no more strata but I spend my time doing the stuff that strata once managed. Also when I factor in the variety of things strata includes such as building insurance, maintenance PLUS the cost of public transport that I now pay that I once didn't …. I almost break even.

  • +1

    You could buy a property in Melbourne, then rent in Sydney.
    Just to get your foot in the door.
    Sydney prices are just insane

    • There was an article in the news the other day about Sydneysiders considering moving to Melbourne because of the prices there.

  • rip off for sure! especially expensive levy fee

  • Consider it like buying a car, it looks nice and need less maintenance and even comes with warranty for the price with high depreciation.

    Versus if you buy a house built back in some decades ago, it's the exact opposite.

  • +4

    ha ppl always go on to blame chinese investors etc….but tell me again who is selling their homes for premium prices or developers who are buying…your average middle-old age aussie who grew up in the 60s-70s. Then they complain about the chinese putting up prices. Well why dont your good old battler aussie refuse to sell it to overseas or for premiumm prices?

    It takes two to tango.

  • Apartment has more security.

    • houses in the right suburbs, with security cameras. will be OK.

      compare with houses on its own piece of land, apartments will have less capital gain, and losing over 3000k each year of your after tax money each year for the strata fee, for me that's robbery.

      • +1

        3000K? Do you mean $3000? Wouldn't land tax, insurance, maintenance or whatever (not very familiar with the costs tbh) cost about the same for a house?

  • -1

    to the OP, just look harder, there are still some solid houses out there, within 20~25km CBD and selling for below 900k.

    and the houses are very solid, just with old kitchens and bathroom… on its own 500 sqm of land.

    the problem is the cohort of young, 30ish, ~100k income before kids earners out there, basically they are the suckers for marketing, they like to borrow to get the most flashy stuff, they like buying from flashy stores and only look at flashy brochures… (apartment and cars). all they care is to look good on instagram. so they travel a lot too.

    they like to buy new apartments because they don't need to mow the lawn and due with any normal house issues, they pay strata to take care for them.
    they like to finance to buy an European car, like the GLC / GLA / C class / Audi A4/A6 / BMW X1, X3 etc… to impress the people they don't like.

    to the OP, just look harder.. they are still some less known suburbs in Sydney with lots of value.

  • Location, location, location.

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