By Joshua Mellic – Research Analyst, Blue Wealth
Property investment has been one of history’s most consistent wealth-generating strategies. In fact it is the most common way to wealth for Australia’s richest 2501.
One of the most common questions we are asked at Blue Wealth is whether to buy a one-bedroom or a two-bedroom apartment.
Many people believe that two-bedroom apartments perform better than one-bedroom apartments.
The Blue Wealth research methodology has always stressed the importance of selecting the right property in relation to the demographic and housing composition of the suburb.
Matching a property to market demands puts you at an advantage when it comes to rental and resale.
We conducted some in-house research in a project that we sold back in 2016 with some recent resales in one and two-bedroom stock.
One bedroom resales:
As we can see above, the one bedroom apartments’ average growth was 20%. We also found that the one bedroom apartments, on average, had higher yields.
Two bedroom resales:
In this project, the two bedroom apartments outperformed the one bedroom apartments. On average, they grew 30% in price (1.5 times more than the one bedroom apartments).
The fact that 40.7% of the people in this neighbourhood, an inner-western suburb of Melbourne, lived in a two bedroom residence compared to just 15.6 percent in a one bedroom dwelling is essential to note.
This implies that the suburban area is more suited to two bedroom living which, in turn, produces greater demand for that style of residence, driving up prices faster.
However, don’t always assume that two bedrooms grow quicker than one.
In this case, two bedrooms did because there was more demand. In other suburbs, the opposite might also be true.
At Blue Wealth, we apply this research to find the best property type that we believe will perform over time for each area.