Property investors turning from units to houses

Investors are now favouring houses over units, according to a study of 4,000 investment properties by MCG Quantity Surveyors.

The study found that last year, 37.5% of the properties purchased by investors were houses, while 33.7% were units (with the rest being townhouses, granny flats and duplexes).

In comparison, units were more popular than houses, by 47.2% to 43.2% in 2016-17.

As with all things in life, investing in a house comes with pros and cons. The pros include:

• Houses are expected to hold their value better during COVID-19
• Houses are often more popular with tenants, because they’re roomier and may include gardens and extra parking
• Houses are easier to renovate than units, and thus have more value-adding potential
• Houses can be renovated without needing approval from an owners’ corporation

The cons include:

• Houses generally cost more to buy than units
• Houses may have negative cashflow (when investors collect less in rent than they pay out in mortgage repayments and other expenses)