The One vs Two Bedroom Story

The whole purpose of investing in property is to build wealth!

Property investment has been one of history’s most consistent wealth-generating strategies. It’s the most common way to wealth for Australia’s richest 250. But for us, one of the most common questions 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 with a project that we sold back in 2016 and has had some recent resales in one and two-bedroom stock.

One Bedroom Resales:

Apartment Number Starting Price Settlement Date Sold Price Sold Date Growth
G05 $339,100 1/07/2016 $420,000 21/09/2021 24%
G23 $331,300 1/07/2016 $385,000 16/08/2021 16%
126 $319,000 1/07/2016 $380,000 21/01/2022 19%

As we can see above, the one-bedrooms average grew by 20%. We also found that the one-bedroom apartments, on average, were higher yielding.

Two-Bedroom Resales:

Apartment Number Starting Price Settlement Date Sold Price Sold Date Growth
102 $439,000 1/07/2016 $555,000 16/02/2022 26%
204 $419,000 1/07/2016 $550,000 28/05/2021 31%
202 $418,000 1/07/2016 $555,000 6/06/2021 33%
G07 $419,000 1/07/2016 $545,000 17/02/2021 30%

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-bedrooms.

The fact that 40.7 percent of the people in this neighbourhood, an inner-western suburb of Melbourne, lived in a 2-bedroom residence compared to just 15.6 percent in a 1-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 residence, driving up prices faster.

However, don’t always assume that one or 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.

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