What’s the best property type for your first home?

With so many exciting options in the real estate market today, what type of property is ideal for a first-time buyer?

You’ve got your deposit saved. Your bank finance is pre-approved. You’re ready to go.

It’s time to start shopping for your first home.

But the days of virtually all first-home buyers choosing a detached house on land in a new suburban estate are over (although this type of home is still a winner with many).

Homes come in all shapes and sizes today and each type has its own unique benefits and limitations.

Here are your basic options and a few pointers to help you work out what suits you best.

A large detached house on an outer suburban block

This is traditional Great Australian Dream housing. The big modern house in a relatively new estate on your own land with plenty of room for dogs to chase balls, children to play backyard cricket and parents to entertain with wild abandon.

Potential upsides include:

• Getting a lot for your money – three or four bedrooms, multiple bathrooms and dual garages are the norm;
• Space – both internal and external;
• Lots of stock – either off-the-plan or only a few years old.

Potential downsides include:

• More travel time getting to city jobs;
• Limited public transport and local amenities;
• Capital value growth may be slower.

• A small home on a subdivided lot

• If you like the idea of some of your own grass but are happy to trade size for a location closer to the city centre, a side-by-side or front-and-back duplex or terrace in a row may just fit the bill.

  You’ll typically find them on suburban blocks that previously had one detached house before they were developed and subdivided into two homes because of the value of the underlying land. Usually found in our cities’ inner and middle-ring suburbs and often require sharing a wall with your immediate neighbour.

  Potential upsides include:

  • A location closer to employment hubs so less time spent commuting;
  • A more affordable way to ‘get into’ a middle-ring suburb without the price tag of a standalone house;
  • Your own small land parcel; no body corporate fees.

  Potential downsides include:

  • Noisy neighbours can create problems because you may share a wall or more;
  • May outgrow your first home quickly if your family’s size grows.

  A townhouse or villa unit

• Townhouses and villa units are a good option if you want location and some extra amenities but don’t want the hassle of maintaining fancy landscaped gardens or cleaning pools.

  Usually managed by a strata manager, townhouses are double-storey can be found in complexes with up to 50 more individual properties onsite.

  The trade-offs are you are usually required to pay body corporate fees and their big numbers of virtually identical properties could mean slower long-term capital value growth.

  Potential upsides include:

  • Modern interiors and appliances are common;
  • Onsite amenities including gyms, pools and tennis courts;
  • Good value for money for a first-time buyer budget

  Potential downsides include:

  • You will be close to lots of neighbours so make sure yours don’t mind housewarming parties;
  • Ongoing body corporate fees on top of your mortgage and other costs;
  • Capital value growth could be slowed by so many identical homes in one location.

  A apartment in a small block

• If living near the action is a must, a unit in a small block close to the city is a good prospect for a first-home buyer.

  Ideally no more than 12 units in a three-storey block, for similar money to a detached house in the mid-to-outer suburbs look for a one- or two-bedroom unit within 10km of the CBD.

  You won’t own your own garden but will share use of the property’s common areas and get easy access to the inner suburbs’ restaurants, shops and public transport.

  Potential upsides include:

  • No garden maintenance cost or time loss;
  • Loads of nearby amenities and public transport options;
  • Good prospects for capital growth that you could use to buy your next property.

  Potential downsides include:

  • You’ll still need to pay body corporate fees;
  • If the building needs repairs you must share the cost via special levies;
  • May outgrow if you plan to have children/dogs.

  • An apartment in a high-rise block

  • If living on top of the action is your thing, a modern apartment home in a skyscraper is the ideal first home for you.

    If you buy your high-rise home off the plan you may qualify for substantial stamp duty savings.

    And if you go shopping for an established apartment you will be spoilt for choice, given how many occupy a typical tower. This stock volume may help you negotiate an affordable price.

    Onsite amenities can include gyms, cinemas, spas, pools, shops and cafes. Of course this comes with a rub; weekly body corporate fees can cost $100 or more.

    Potential upsides include:

    • Money saved commuting to the city for work or pleasure;
    • Good supply in metropolitan areas;
    • Views, modern fixtures and fittings, and potential stamp duty savings.

    Potential downsides include:

    • Lots of stock means value growth may be slower;
    • Body corporate fees can hurt first-time buyer cash flow;
    • Won’t suit buyers with vertigo or who love to mow.
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