First home buyer decisions: Apartment or a house on land?

If you’re looking to buy your first home in 2026, one of the first big questions is whether an apartment or a house makes more sense for you, which often comes down to your lifestyle, financial situation and what you’re working towards.

Each option comes with its own benefits and trade-offs, so understanding the differences can help you make a more confident decision.

Let’s take a look at the pros and cons of each.

Apartments

Pros

Lower price tag

Buying an apartment may allow you to get into the market sooner, as apartments are usually more affordable than houses.

Take Sydney, for example, where the median house price is more than double the city’s median unit price.

A lower purchase price usually means a smaller deposit and a more manageable mortgage.

Capital growth potential and rental appeal

Historically, houses have outperformed apartments in capital growth across most Australian cities. However, recent data shows that apartment prices have been growing faster than house prices in most capital cities – although Melbourne buyers are not quite convinced.

If you decide to rent the property out in future, apartments can possibly offer an attractive rental yield (the annual rental income as a percentage of the property’s value) in some areas.

Lower running costs

Living in a smaller property means less electricity and gas usage, and therefore lower utility costs.

Less maintenance

Apartment living often comes with less maintenance and common areas are typically looked after by strata management. This means you’re less likely to spend weekends mowing lawns or tending gardens.

Security and lifestyle appeal

In some cases, apartments may provide added security compared to suburban houses, particularly in complexes with controlled access.

They’re also frequently positioned in central or well-connected locations, close to cafés and other everyday amenities.

Cons

Strata or body corporate constraints

Apartment living often comes with strata or body corporate rules, such as limits on pets, renovations, or noise. While these help manage shared spaces, they may feel restrictive for some owners.

Costly fees

Depending on the amenities, strata fees can be costly and are an ongoing expense. Over time, these fees can add to the overall cost of apartment ownership.

Less space and privacy

Living in a smaller space is not for everyone. Common areas can also mean sacrificing your privacy, as you’ll be sharing these areas with neighbours.

Oversupply risk

In suburbs with a high number of apartments, oversupply can affect demand and resale value. Boutique complexes with fewer units may perform better than large high-rise developments.

Houses

Pros

Long-term capital growth potential

Houses have traditionally delivered stronger long-term capital growth, largely due to the value of the land. That said, apartments in some cities have recently recorded faster short-term growth.

No strata constraints or fees

Unlike apartments, houses don’t come with strata fees or body corporate rules. This generally gives owners more freedom to renovate, extend, or personalise their home.

More space and privacy

Houses typically offer more internal and outdoor space, along with greater privacy. This can be appealing if you value room to entertain, garden, or enjoy facilities like a pool without interruption.

Cons

Higher entry point

Houses generally come with a higher purchase price and require a larger deposit. For some buyers, this may mean looking further from the CBD or their workplace to stay within budget.

More maintenance

With more space comes more upkeep. Houses typically require ongoing maintenance, and older properties can involve higher repair and renovation costs over time.

Higher costs

A higher purchase price can also mean higher upfront costs, such as stamp duty. Ongoing expenses like insurance and general upkeep may also be higher compared to an apartment.

Ready to get started?

There’s no universal ‘right’ answer as to whether an apartment or house is better. It all depends on your budget, lifestyle and long-term goals.

If you’d like help understanding your borrowing capacity or talking through your purchase plans, get in touch today. We can review your finances and help you assess which type of property may be the best fit for you.

Source: https://financefocus.connective.com.au/first-home-buyer-decisions-apartment-or-a-house-on-land/