Pros and cons of living in an apartment

There’s a lot to love about apartment living. No matter whether you’re after the buzz of an inner city lifestyle, are ready to take that first step on the property ladder, or you’re looking to downsize to a low maintenance home, apartments can tick plenty of boxes.

According to the Census released in June 2022, nearly 2.5 million people live in apartments – and that figure could be set to rise as freestanding houses become less affordable.

There are upsides and drawbacks to living in an apartment, so it pays to be sure that apartment living is right for you. Take a look at our list of pros and cons before deciding if an apartment suits your lifestyle.

What are the pros of living in an apartment?

Living in an apartment can bring benefits like better affordability, less maintenance, plenty of amenities, extra security, savings on insurance and greater flexibility to afford to live in a location you prefer.

Affordability

There’s no doubt that apartments can pack plenty of punch when it comes to affordability. That can be very appealing to first home buyers or if you’re on a tight buying budget. Figures from CoreLogic’s March 2024 Home Value Index (HVI) report, show units rising 6.9% in value in the last year to date across Australia’s capital cities, to reach a median value of $640,162. A saving on the purchase price can bring extra benefits too, such as savings on upfront costs that are linked to the purchase price, such as stamp duty.

Less maintenance

Spending weekends mowing lawns and cleaning out gutters (or paying someone else to do the job) takes up a lot of time and money. Apartment living can cut maintenance costs to near-zero. Maintenance of the building, gardens and amenities is typically covered and taken care of by either the landlord or the body corporate. This means there is more time to enjoy life, less time weeding the gardens, and possibly saving on maintenance expenses. Bear in mind though, that if you own your apartment you will likely need to contribute towards maintenance costs through strata levies or body corporate fees.

Amenities

Apartments have come a long way in recent years, and many complexes have all the features you’d expect of a high quality resort; including pools, spas, barbecue areas, and of course, well-equipped gyms.

Security

Our home is a place where we should feel and be safe, and apartment living can really shine on the security front. Apartments often feature key code entry systems or intercoms that help to prevent intruders entering the building, and other residents are likely to be around to notice any suspicious behaviour.

Location

Choosing an apartment rather than a house can be the key that lets you live exactly where you want to be – whether that’s right opposite the beach, in the heart of the city centre, or 20 storeys above street level basking in bird’s eye views.

Savings on insurance

As an apartment owner you’ll need to take out contents insurance to cover the value of your belongings. But building insurance is organised and paid for by the strata body (or body corporate), which will insure the entire complex, so you won’t have to pay this expense directly.

What are the cons of living in an apartment?

Cons of living in an apartment can include a smaller living space, less privacy, more noise, strata levies and reduced renovation potential.

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Smaller living space

Good things come in small packages, right? A smaller size living space can mean lower energy bills, less housework and savings on furniture. But there are drawbacks too. You may have limited private outdoor areas in an apartment and less storage space, and it can be a tight squeeze if you have children or are planning a family.

Privacy

We all value privacy, and this is an area where apartment living can mean compromising. Additional facilities you may enjoy such as a pool or gym will be shared with other residents. Your outside space, such as a balcony, is likely to be right alongside your neighbour’s. So if an element of communal living isn’t for you, an apartment may not be your ideal choice.

Noise

Noise can be a serious issue. It doesn’t just impact our mental health, but it can also affect concentration, which can be an issue if you work from home. The Australian Government on its Your Home website reports that non-traffic-related noise complaints are rising, particularly in medium and high-density housing areas. Many new medium and high density developments are unnecessarily noisy, and the sound insulation requirements for multi-unit housing and apartment buildings are not particularly high.

This highlights the need to consider potential noise problems before you buy or rent an apartment. Of course, you can also have noisy neighbours if you buy a house too.

Strata levies

If you buy an apartment, expect to pay quarterly strata levies (or body corporate fees). These cover the cost of maintaining the building and shared facilities such as gardens, pool and lifts, as well as paying for building insurance. As a rule, the more facilities your building has, the higher the strata levies are likely to be.

Less renovation potential

An apartment is part of a larger building, so you simply won’t have the same scope to undertake major renovations that a house offers. Even something as simple as installing downlights can be a problem as it means drilling into the ceiling, which is technically ‘common’ property shared with other owners.

You may have to let the body corporate know about any renovations that involve changes to the exterior of your apartment, or if the work could impact other residents through noise or tradies parking in common areas..

What are the home loan options for buying an apartment?

In terms of the home loan process, financing an apartment is typically much the same as securing a loan for a house; with a lender interested in how much you earn, the size of your deposit and the value of the property.

But if you’re looking for a home loan to buy an apartment there are two potential traps to avoid. The first is that lenders may shy away from certain postcodes, where there is a significant oversupply of apartments. Banks don’t make these postcodes public, so it can be worth talking to a mortgage broker or local property expert to get a feel for whether the neighbourhood you’re looking at could be a no-go zone for lenders.

The other pitfall is that some lenders won’t provide finance for very small units, often sized below 40 square metres, like studios. All is not lost though. There are lenders happy to provide a home loan for a studio. It’s all about researching different lenders to find the lender and loan that’s right for you.

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