HIGH-RISE APARTMENTS VS HOUSES: WHICH INVESTMENT COMES OUT ON TOP?
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HIGH-RISE APARTMENTS VS HOUSES: WHICH INVESTMENT COMES OUT ON TOP?

As Australia accelerates apartment construction, investors face a critical decision between high-rise living and land-backed homes.

By Nina Hendy
Fri, Feb 20, 2026 10:41amGrey Clock 3 min

Australia’s housing shortage has long positioned real estate as a cornerstone of wealth creation. But as governments push to deliver 1.2 million new homes, many of them high-rise apartments, investors are increasingly weighing whether vertical living offers the same long-term returns as traditional houses.

While apartments offer lower entry prices and strong rental demand in key locations, critics warn that strata costs, oversupply and lack of land ownership can undermine long-term capital growth.

LOCATION AND LIFESTYLE DRIVE DEMAND

Company RE chief executive Marcus Buskey says thoughtfully designed high-rise developments in lifestyle precincts can deliver strong returns, particularly in premium coastal markets.

Demand remains robust across the Gold Coast and inner-city Brisbane, driven by downsizers, professionals and interstate buyers seeking convenience and lifestyle.

“Apartments in premium Gold Coast areas like Mermaid Beach, Broadbeach and Burleigh Heads have consistently demonstrated capital growth, driven by limited availability, desirability of location and ongoing demand from lifestyle-focused buyers,” Buskey says.

He adds that quality, exclusivity, views and proximity to amenities remain critical factors influencing performance.

MELBOURNE MARKET SHOWS MIXED SIGNALS

Melbourne project marketing specialist Jon Ellis, founder of The Move, says apartments continue to dominate transactions, accounting for 360 of his last 400 sales.

However, he warns not all developments perform equally.

“Some lower-grade apartments in Melbourne may never go back up to the sales price they were achieving a few years ago,” Ellis says.

He notes that construction costs have risen sharply, making it harder to deliver strong investment yields. Yet demand remains strong for well-executed developments.

“Investors purchasing an apartment for $600,000 need to get about $600 a week in rent. If you can get that right and prove it, demand for apartments certainly outstrips residential houses.”

THE LAND FACTOR REMAINS CRITICAL

Like all investment opportunities, others favour a freestanding home over a high-rise apartment.

“In my opinion, the only people who make money from high-rise apartments are the developers who build and sell them,” buyers’ agent Gianni Musumeci says.

For this reason, the Sydneysider steers investors away from high-rise apartments. “While they may appear to be an appealing investment on the surface with attractive guarantees, modern designs and convenient locations at somewhat lower entry points, high-rise apartments are, in my view, rarely a good investment,” Musumeci, of  Leverage Property Advisers, says.

“This is especially the case when compared to standard residential homes in suburban markets, primarily due to the overwhelmingly high supply of apartments, the high level of cash flow expenses, the number of defects commonly found in high-rise buildings and the cost to remediate them, as well as the lack of land ownership, which is the primary driver of capital growth.”

“Economics 101 tells us that capital growth is achieved when diminishing supply meets increasing demand. The issue with high-rise apartments is that they’re typically built in areas with overwhelming supply, and often, that supply exceeds demand,” he says.

“These developments are usually located around major transport hubs, and as a result, if you’re looking to buy in one of these areas, you’re competing with dozens or even hundreds of similar listings.”

“Apartments are far easier to mass produce because the only restriction is how high you can build. You can’t expect strong growth in a market that’s saturated. In contrast, standalone residential homes are limited by land availability,” Musumeci says.

WEALTH CREATOR FAVOURS FREEHOLD PROPERTY

Entrepreneur and investor Scott O’Neill, who has amassed a combined net worth of $153 million with his wife Mina, says his personal experience has reinforced the benefits of freehold ownership.

He owned a high-rise apartment early in his investing journey but sold it after two years.

“The yields can vary significantly, ranging from four to seven per cent, but that’s before accounting for sinking funds and strata fees. Your net returns often drop to between one and two per cent,” O’Neill says.

He says oversupply and rising strata costs can further weaken performance.

“Most long-term property owners end up selling high-rise apartments in favour of freehold properties.”

INVESTMENT DECISION DEPENDS ON STRATEGY

Despite the risks, apartments can still deliver strong results when chosen carefully.

Experts agree that location, developer quality, supply levels and long-term demand are critical factors.

While houses continue to offer superior land value and long-term growth potential, apartments can provide attractive yields and accessibility for investors seeking exposure to high-demand urban markets.

Ultimately, the right investment depends on an investor’s strategy, time horizon and appetite for risk.



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RENOVATION REVOLUTION RESHAPES AUSTRALIA’S LUXURY HOMES

High-end homeowners are choosing to upgrade rather than relocate, investing in bespoke design, premium finishes and long-term lifestyle value.

By Jeni O'Dowd
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Australia’s prestige homeowners are increasingly choosing to reinvent their existing properties rather than enter an uncertain property market, fuelling what industry insiders are calling a “Renovation Revolution.”

From heritage terraces to coastal retreats, this shift reflects a deeper change in mindset. Homes are no longer viewed as stepping stones, but as long-term assets worthy of thoughtful investment and personalisation.

“Homeowners are approaching renovation with purpose, balancing lifestyle needs, design aspirations, and long-term return on investment,” says Jodie Cramer, CEO of Andersens, a national flooring and interior finishes company.

“Viewed through this lens, renovating often makes more financial sense than moving. Homeowners with built-up equity are confidently premiumising their space, achieving better returns on capital.”

More than half of Australian homeowners were planning renovation or improvement projects within a year, with many considering structural changes such as reconfigured floor plans, extensions, or even additional levels.

Personalisation becomes the ultimate luxury

For affluent homeowners, renovation is no longer driven solely by financial logic. It is about crafting environments that reflect individual lifestyles, values, and aesthetic sensibilities.

“Home upgrades allow families to customise their spaces,” says interior designer Delena Pitman.

“They’re not always looking to move up the property ladder; they want to make where they are feel more like home. Renovations give people the freedom to design functional, comfortable, and visually inspiring spaces.”

This trend aligns with the broader luxury movement toward intentional living, where design choices prioritise comfort, wellbeing, and enduring quality over short-term trends.

Jodie Cramer

Flooring sets the foundation for luxury interiors

Among the most transformative elements in any high-end renovation is flooring, which establishes the visual and tactile foundation of a home’s design.

“Think of flooring as the canvas for your entire home,” Pitman explains. “Once it’s chosen, everything else — furniture, lighting, window treatments, and accessories — becomes easier to select, and the space feels cohesive and intentional.”

Premium materials such as engineered timber, natural stone and luxury vinyl planks are increasingly favoured for their durability and aesthetic appeal, while softer textures like wool carpet add warmth and acoustic comfort to private spaces.

Continuous flooring across open-plan living zones enhances spatial flow, while darker tones such as walnut or charcoal introduce richness and sophistication.

Designing cohesive, layered spaces

Today’s most successful renovations are guided by a holistic design approach, where flooring, cabinetry, lighting and furnishings work in harmony.

“Change the floor, and everything else either harmonises or clashes — it’s the anchor of your interior design,” says Pitman.

“Once the floor is selected, you can choose wall colours to complement or contrast, coordinate cabinetry and countertops, and adjust lighting to provide bright task illumination or soft mood lighting.”

This layered approach allows homeowners to create interiors that feel both elevated and deeply personal.

Renovation as a strategic property investment

Beyond aesthetics, renovation is increasingly viewed as a strategic investment decision. In prime suburbs and lifestyle regions alike, improving an existing home often delivers greater value than purchasing anew.

This approach enables homeowners to preserve location advantages while enhancing liveability, energy efficiency and long-term capital value.

Whether upgrading a waterfront residence, modernising a federation home, or refining a contemporary coastal retreat, the message is clear: in Australia’s luxury property market, the smartest move is often staying exactly where you are — and transforming it into something exceptional

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