House or apartment: Which 2014 purchase would have paid off better today?

Houses typically offer more space and privacy, but often at the cost of a less central location. Apartments, while generally smaller, frequently boast prime urban positions and lower maintenance responsibilities. But beyond immediate lifestyle considerations lies a crucial financial question: which choice would have yielded a better return on investment over the past decade? The answer, not surprisingly, depends on where you bought.

To answer this question, we used Neoval data to see what a house priced at $500,000 in 2014 would be worth now compared to a unit purchased at the same price. While nationally, a house purchased at this price has performed better, at a capital city level, the results are more nuanced.

On average, a house purchased in Australia at $500,000 in 2014 would have increased by 84 per cent to $921,200, while an apartment purchased at the same price would have increased by 40 per cent to $700,400. However, the gap is greatest in Sydney where the house would have almost doubled while the unit would have increased by 37 per cent. 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.

At a suburb level, there are a lot of areas where a $500,000 apartment 10 years ago was a much better investment. Topping the list is Upper Coomera on the Gold Coast where a house purchased at this price would be worth $1.02 million while an apartment would be worth $1.11 million. Canberra also features heavily with Weston and Waramanga all being places an apartment would have been a better purchase.

At the other end of the scale, buying a house in Geelong and many South-East Queensland suburbs would have been a better option than an apartment. In Geelong, a $500,000 house purchased in 2014 would now be worth on average $937,700 compared to an apartment at $626,000