What you should have bought to make the most money from real estate

Reflecting on the property you should have bought ten years ago to make the most money possible, one option is ahead of the rest.

Houses have outperformed units when comparing 2014 prices to today, at a national level and when measured state to state, Ray White figures show.

The national real estate agency crunched the numbers on how much a house and a unit (or apartment) purchased for the same sum a decade ago would be worth today.

Nationally, houses are worth at least $220,000 more than apartments – both bought for $500,000 – but drilling down to capital city level, the width of the gap depends on location, Ray White economist Nerida Conisbee found.

A house secured for $500,000 in 2014 is worth an average of $921,200 today and an apartment costing $500,000 would clock in at $700,400, should it transact again in 2024.

Houses have gone up 84 per cent over the decade, versus apartments at 40 per cent growth over the same period, national sums reveal.

Was is better to buy? A house or an apartment?

A breakdown of prices per city exposes rich variation, Ray White and Neoval data shows. In Hobart, the price difference is minor compared to the chasm in Brisbane and Sydney.

“…the gap is greatest in Sydney where the house would have almost doubled while the unit would have increased by 37 per cent,” Conisbee said in the agency’s economic statement.

“A similar situation occurs in Brisbane where the gap is also wide – a house more than doubling compared to a unit increasing by 53 per cent.”

“In direct comparison to Melbourne and Brisbane, buying a unit or a house for $500,000 in Hobart almost yields the same results now.

“The house would be worth on average $1 million now, the unit $996,000. The gap in Darwin is also similar, although both would have fallen with the $500,000 unit now worth 14 per cent less compared to one per cent less for the house.”

Conisbee said in the report that houses don’t necessarily do better than apartments.

” At a fundamental level, it holds that land holds value and therefore owning it should yield better returns,” she said. “However, it depends on where that land is located – well serviced land in highly livable areas being worth far more than areas that are less so.

“Secondly, housing supply creates greater levels of affordability. Very high levels of property development in Melbourne and Sydney has created affordability for apartments relative to houses. In Hobart where fewer apartments have been built has led to a greater increase in apartment prices, almost on par with houses.”

Houses and apartments for sale right now in Sydney

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34/10-12 Thomas Street, Parramatta NSW 2150

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The two-bedroom unit has an undercover terrace to hang out on year around.

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10/63 O'Sullivan Road, Rose Bay NSW 2029

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The character-filled property is only 100 metres to the harbour foreshore.

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10/128-158 George Street, Redfern NSW 2016

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The apartment is offered to a new owner for the first time in decades.

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53 Pine Street, Manly NSW 2095

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Chill out on the deck after a long day catching Manly’s famous waves.