There is a property debate raging at present – some say the future for property is bright while others suggest our markets are set to crash. Michael Yardney gives us 7 reasons why it won’t crash.

Economist Dr Andrew Wilson gives us his view on the house vs unit debate, Brad Beer has compiled his New Years resolutions for property investors and Ken Raiss answers Chris’s question about equity shifting.

Thanks for all the questions coming in as well. It is how we know what you want to hear about. As well we award our question of the week with a 12 month subscription to Australian Property Investor magazine. Another one coming up today!

Also during the week we heard from Paul in WA, who owns several properties in that state and, through council rezoning, has the opportunity to subdivide but he wants to know the impact of a flood of similar properties onto the market. We talk to a WA agent who gives us the lowdown.

Sam Saggers joins us today as well. Sam talks about his portfolio and why he favours city property investment over regional properties.

 
Transcripts:
Andrew Wilson
Kevin:  A common question I’m asked is “What makes a better investment? Is it a unit or is it a house?” Let’s check in with Dr. Andrew Wilson, senior economist with the Domain Group, and get his thoughts on that.

Good morning, Andrew.

Andrew:  Good morning, Kevin. How are you?

Kevin: Well, thank you. What would you say in answer to that question?

Andrew:  Well, look, it’s “How long is a piece of string?” really, Kevin. It depends on the location. It depends on the price point, of course. Typically, units have a lower price point, are less expensive, I guess, more affordable than houses for an investor, and that typically means a higher yield.

The disparity between prices is different to the disparity between the rents when you compare houses and units. That means typically you get a higher yield from an apartment than you would from a house. But at the other end, you tend to get lower vacancy rates on a house. There’s more demand for houses. Lower vacancy rates, so higher occupancy rates, typically, compared to unit.

But it does depend on where you’re looking and the market. Of course, apartments do suit those investors who are looking for a lower entry point, and houses, of course, may suit those who are looking for investment property in their particular region if they’re living in a middle- or an outer-ring suburb. Look, a lot of investors like to connect with the property that is in their local neighborhood or adjacent to their local neighborhood.

Kevin:  Of course, it’s always going to be a better investment in a unit if you’re looking at an area that’s predominantly servicing students. As an example, there are so many of those educational hubs around Australia where definitely, a unit probably is going to be a better investment. So it comes down to location and really what’s what happening in that area, Andrew?

Andrew:  Absolutely, Kevin. That’s a good point. There’s certainly a market for student accommodation. There are now purpose-built developments that are designed specifically for students. I guess they’re what we call the old fashioned bedsit type of apartment, which is basically a single room and then a bathroom, and they’re designed for single-student accommodation.

A lot of developers have a one-shop stop type of project whereby they provide all the services, and all the particular on-costs that are involved with apartment living, and of course, they’re designed for overseas students, as well.

These can, for investors, become an interesting proposition because again, they can have a very low entry point in terms of the price of student accommodation units, and of course, they have higher yields.

Kevin:  Yes. Of course, you have to think of things like vacancy, too. If you’re going to be going into a highly residential area where you’re going to be attracting a family,