What are the six major house types. How to choose a first home that meets your needs.

There are six major house types you could consider buying as your first home and in this blog, I've listed what I believe are the positive and negative attributes of each type. I suppose you could view it as a Pros and Cons list. When trying to decide on the type of house you should buy, you should have a list of key criteria your home must satisfy. With your key criteria in mind, here are your options:


  1. House Constructed Pre-War (before 1945)

  2. House Constructed Post-War (after 1945)

  3. Build Your Own / Knock Down Re-build

  4. Apartment

  5. Townhouse / Unit

  6. Off The Plan


Before You Start: There’s an important property term that you need to understand. It’s the living area. If you’re considering buying an apartment, townhouse or off the plan, you must know how to calculate it. The living area is the total floor area inside the building envelope (the external walls). Think back to grade six maths and remember how to calculate the area of an object. Start by checking online for the floor plan of your potential first home. This plan should show the internal dimensions of each room, which will allow you to calculate the area. For example, if the internal dimensions of the bedroom are 3 metres x 3 metres, the floor area of that bedroom is 9 square metres (sqm). You can work out the floor area of each room, then add them all up to get the total area. I recommend you grab a tape measure and double-check these measurements when you attend the open for inspection.



1. House Constructed Pre-War (before 1945)


Positives

  • Typically located in well-regarded suburbs close to the CBD with easy access to amenities and public transport. You won’t need to rely on your car as much.

  • Built with high ceilings that give a greater sense of light and space.

  • Potential for a complete renovation and rear extension.

  • There’s generally strong demand for a pre-war house with an appealing facade and well-maintained original period features. Period homes tend to outperform the broader housing market.

Negatives

  • May require a more substantial upfront investment for re-stumping, rewiring, re-plumbing.

  • Older fixtures may require ongoing maintenance or replacement.

  • Older fixtures are less energy-efficient and more expensive to run.

  • Poorly insulated, making them more costly to heat and cool.

What you should look for?

  1. Walking distance to public transport and amenities.

  2. Walking distance to highly rated primary and secondary schools.

  3. Located in the best street or neighbourhood.

  4. The original period features have been well maintained.



2. House Constructed Post-War (after 1945)

Positives

  • Typically built with modern construction techniques and should be structurally sound. A post-war house that has been well-maintained should not require any significant upfront investment.

  • Potential for internal renovation, especially the kitchen and bathroom.

  • Typically built on larger blocks which allow for a bigger backyard.

Negatives

  • Typically located further from the CBD, which means reduced access to amenities and public transport. If you buy with your partner, you may need two cars.

  • Older fixtures may require ongoing maintenance or replacement.

  • Older fixtures are less energy-efficient and more expensive to run.

  • Older buildings may be poorly insulated, making them more costly to heat and cool.

  • When undertaking a renovation there’s potential to overcapitalise, which implies you spent too much money, and you’re unable to recoup this amount when you try to sell it.

What you should look for?

  1. Located in the best street or neighbourhood.

  2. Walking distance to public transport and amenities or option to drive and park.

  3. Good access to arterial roads and freeways.

  4. Highly rated primary and secondary schools which are easily accessible by car.



3. Build Your Own / Knock-Down Rebuild


Positives

  • Ability to choose a floor plan and block size that best suits your needs.

  • Brand new when completed.

  • Should come with a builder’s warranty for the structure and warranties for the fixtures.

Negatives

  • The process could take 12 – 24 months depending on the builder and architect you choose.

  • Construction risk, which includes poor quality workmanship, cost blowouts and time extensions.

  • Reduced access to amenities and public transport as there’s a scarcity of land close to the CBD.

  • There’s potential to overcapitalise.

What you should look for?

  1. Located in the best street or neighbourhood.

  2. Walking distance to public transport and amenities, or option to drive and park.

  3. Good access to arterial roads and freeways.

  4. Highly rated primary and secondary schools which are easily accessible by car.

  5. A block of land that’s flat and rectangular which will be easiest to build on.

  6. The availability of high-quality builders.



4. Apartment


Positives

  • Typically located close to amenities and public transport.

  • Built with modern construction techniques and should be structurally sound. Well maintained units shouldn’t require any significant upfront investment.

  • Potential for older apartments to be renovated, especially the kitchen and bathroom.

  • Cheaper to buy than a house in the same location.

  • Art Deco apartments are typically well constructed, located in smaller developments (4-12 apartments) and feature high ceilings and period details. They’re generally in high demand, which means they should hold their value relative to the broader housing market.

Negatives

  • If the apartment has a living area (refer to the definition at the start of this section) smaller than 50 sqm, it can be more challenging to get a home loan. Your bank may require you to have at least a 20% deposit, and in some instances, I’ve heard of banks requesting a 40% deposit.

  • If the apartment has a living area smaller than 40 sqm, many banks will refuse to offer you a home loan. The banks see smaller apartments as a more high-risk proposition.

  • Older fixtures may require ongoing maintenance or need replacement.

  • Older fixtures are less energy-efficient and more expensive to run.

  • Apartments built after 1970 typically don’t hold their value relative to the broader housing market.

  • Apartment developments usually have Common Property that’s managed by an Owners Corporation or Body Corporate (refer to Step 6 for a more detailed explanation). You’ll need to pay an annual fee which covers insurance and maintenance. Fees are generally higher when there’s a lift, a gymnasium, or a pool in the development.

  • The building may have been constructed with cheaper lightweight materials that can age poorly and may not be compliant with Australian Building Codes. One such material is Composite Aluminium Cladding. It has been used in some modern apartment developments and has lots of industry experts worried because it’s highly flammable. I’ve included a link to an ABC Four Corners investigation, Australian High-Rises Swathed In Flammable Cladding to give you some background. If you’re unsure of the materials used to construct the building, I recommend you talk to a building inspector.

What you should look for?

  1. Located in the best street or neighbourhood.

  2. Walking distance to public transport and amenities.

  3. Walking distance to highly rated primary and secondary schools.

  4. A living area that is larger than 45 sqm for a one bedroom apartment, and larger than 70 sqm for a two bedroom apartment.

  5. An apartment with good access to natural light and ventilation.



5. Townhouse or Unit

Positives

  • Typically located near amenities and public transport.

  • Built with modern construction techniques and should be structurally sound. Well maintained units should not require any significant upfront investment.

  • Potential for older buildings to be renovated, especially the kitchen and bathroom.

  • Cheaper to buy than a house in the same location.

Negatives

  • If the unit has a living area (refer to the definition at the start of this section) smaller than 50 sqm, it can be more challenging to get a home loan.

  • If the apartment has a living area smaller than 40 sqm, many banks will refuse to offer you a home loan.

  • Unit developments typically have Common Property that’s managed by an Owners Corporation or Body Corporate (refer to Step 6 for a more detailed explanation). You’ll need to pay an annual fee which covers insurance and maintenance. Fees are generally at the lower end of the scale.

  • Older fixtures may require ongoing maintenance or need replacement.

  • Older fixtures are less energy-efficient and more expensive to operate.

  • Older buildings may be poorly insulated, making them costly to heat and cool.

What you should look for?

  1. Located in the best street or neighbourhood.

  2. Walking distance to public transport and amenities.

  3. Walking distance to highly rated primary and secondary schools.

  4. A living area that is larger than 80 sqm for a two bedroom unit, and larger than 110 sqm for a three bedroom unit.

  5. A unit with a decent size courtyard that’s ideally north facing.

  6. A unit with good access to natural light and ventilation.



6. Off The Plan - Apartment, Townhouse or Unit


Positives

  • Typically close to amenities and public transport.

  • Built with modern construction techniques and should be structurally sound.

  • Brand new when you move in.

  • Should come with a builder’s warranty for the structure and warranties for fixtures.

  • Potential to save on stamp duty. The amount you save will depend on the stage of construction at the time of purchase.

Negatives

  • Like buying a new car, you pay a premium for it being ‘brand new’. Once lived in, the premium dissipates rapidly. If you try to re-sell it in the first few years, you may find it challenging to achieve a price similar to what you paid for it.

  • If the unit has a living area (refer to the definition at the start of this section) smaller than 50 sqm, it can be more challenging to get a home loan.

  • If the unit has a living area smaller than 40 sqm, many banks will refuse to offer you a home loan.

  • Typically will have Common Property that’s managed by an Owners Corporation or Body Corporate. You’ll need to pay an annual fee which covers insurance and maintenance. Fees are generally higher when there’s a lift, a gymnasium, or a pool in the building.

  • Typically do not hold their value relative to the broader housing market, particularly in areas where there’s lots of new development occurring.

  • The building may have been constructed with cheaper lightweight materials that can age poorly, and may not be compliant with Australian building codes. Refer to the ABC Four Corners Composite Aluminium Cladding investigation for more information.

  • When you can’t physically stand inside the finished product, it’s hard to visualise:

  1. The size of the unit and your ability to move around freely.

  2. The quality of construction and the standard of the fittings.

  3. The access to natural light, views, and whether you’ll be looking directly onto your neighbour.

What you should look for?

  1. Located in the best street or neighbourhood.

  2. Walking distance to public transport and amenities.

  3. Walking distance to highly rated primary and secondary schools.

  4. A living area that’s larger than 45 sqm for a one bedroom apartment, and larger than 70 sqm for a two bedroom apartment.

  5. An apartment with good access to natural light and ventilation.

  6. A living area larger that’s than 80 sqm for a two bedroom unit, and larger than 110 sqm for a three bedroom unit.

  7. A unit with a decent size courtyard that’s ideally north facing.

  8. A unit with access to natural light and ventilation.



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Hi, I'm Tim Stafford

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About Tim

Tim is a​ property valuer with more than 15 years' experience in the property and construction industry, having completed more than 15,000 valuations. 

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