the front driveway of a duplex home

Choosing to Build a House vs a Duplex

Vision HomesDuplex

With Australia’s property market more competitive than ever and property values continuing to rise, home buyers need to think innovatively about how to get ahead. While single family homes remain the obvious choice for many, savvy home builders are weighing the need for more space against the financial freedom that duplexes offer.

In this article, we look at how a dual occupancy investment strategy can deliver you your dream home as well as significant profits and investigate why some people are reluctant to build twin homes.

Read on to find out if two houses are a better option than one for you and your family.

What is a Duplex?

A duplex is generally a single structure with two separate living units that share a common wall. They are self-contained, with their own entrance, and can be either on one title or two. If on separate titles, they can be individually owned and sold. A duplex home is sometimes called a ‘semi-detached’ house. However, a duplex house can also be one home on top of the other and, in some cases, detached.

Duplex properties differ from townhouses in that they generally have fewer shared walls. Townhouses are usually part of a row of homes, and while the homeowner owns the dwelling, the land is typically shared.

When to Consider Building a House

A single-family house is the best option for those seeking privacy and space because they are typically larger and don’t share walls or outdoor space with any other properties. Single-family homes also provide a greater amount of design freedom, which is why they remain the most popular type of housing in Australia.

However, with the cost of land and established homes at an all-time high, homebuyers need to question if these lifestyle preferences are worth potentially sacrificing the dream of home ownership, and whether alternative types of housing may be a more suitable path.

When to Consider Building a Duplex

While single-family homes remain the preferred choice for many, duplex living is gaining popularity due to the affordability factor.

It’s cheaper to build a duplex rather than two single-family homes on the same block because shared walls mean reduced construction costs. And, because it’s a single lot, land costs are lower than buying two blocks of land. They also have lower maintenance costs, and the cost of utilities can be shared. This makes duplex properties highly attractive to people looking for a multi-generational living option.

A duplex development also offers great investment potential. You can live in one unit and sell the other. Or you can use rental income to provide a passive source of income. This makes a duplex investment a smart move for people looking to offset mortgage costs.

Another benefit of duplex properties is the tax benefits, with tax deductions significantly reducing what you need to pay in tax. For those looking to build an investment property, two rental incomes instead of one is a smart choice, especially in areas with high capital growth.

Key Differences: House vs Duplex

Duplex properties

Single family homes

Construction costs

Higher due to double amenities.

Lower than duplex properties.

Council and zoning

There may be stricter zoning requirements; may require development application.

Suitable for standard residential zoning.

Return on investment

Long-term financial gains from rent or sale of one unit.

Lower rental income yield.

Insurance

May require shared insurance.

Single insurance policy.

Strata implications

Extra legal costs if strata titled. Property management fees may also apply.

No shared space.

Resale

Can sell two separate dwellings if titled appropriately; appeals to investors and multi-gen buyers.

Broader market appeal.

Financing

May require investor loan for dual titles.

Standard loans apply.

Council and Zoning Requirements

The requirements for duplex developments vary greatly between states. In Queensland, for example, the approval path will depend largely on your local council area, but they are usually allowed in areas zoned low–medium density. In Victoria, duplex homes require a Planning Permit as well as a Building Permit and minimum lot sizes may apply though they are typically allowed in General Residential zones and Residential Growth Zones. In New South Wales, the approval process can be straightforward if the duplex is a Complying Development, though most will require a Development Application through local council.

Each state and council zone will also have different restrictions on duplex developments, including heights, setbacks, and lot sizes. Therefore, it’s important to conduct your own feasibility study before you decide whether a duplex is the right project for your family.

Financial Considerations of a House vs a Duplex

While we covered a few of the financial implications of each type of housing in our comparison above, it’s also important to consider the long-term implications of a duplex build compared to building a home for one family.

While a single-family home is more cost effective to build than two units, they offer less in terms of rental yield. Duplexes also offer a passive income that can help service a mortgage and give you more freedom in the long run. However, they may be more challenging to sell as they don’t appeal to the same broad market as a single-family home.

You also need to consider how single and dual titles will affect stamp duty costs, as strata titling can simplify resale and reduce the stamp duty burden for buyers.

Common Misconceptions Surrounding Duplexes

Many buyers are hesitant to consider building two homes under one roof because they look only at the initial cost and not the potential for making money. However, duplexes are not just for investors; they are also a great way to live in a brand-new home that you love and pay your mortgage off faster.

Another common misconception is that you need a huge block to build a duplex. As long as your block meets minimum lot size requirements in accordance with your local laws, you can often build a duplex on a normal-sized block of land.

Three scenarios in which duplexes are a better option

Here are 3 cases in which building a duplex makes more sense, from a lifestyle perspective as well as financially.

Securing a financial future

A couple in their late 40s, we’ll call them Ben and Sarah, have a mortgage and teenagers at home. They use their existing home equity to fund the construction of a duplex on their land. The idea behind this move is secure their financial future and simplify their lives as they prepare to become empty nesters in the coming years.

By building a duplex home, Ben and Sarah are able to create a steady stream of income as they live on one side and rent out the other. By making this decision before they reach retirement age, they have a comfortable place in which to live and have set themselves up for a future free of financial worries.

Instant equity for investors

Savvy investor Graham is looking to put himself into the best financial position possible with his next property move. By choosing to build a duplex home on his block of land instead of a single-family home, Graham knows he will be able to accelerate equity growth.

With the aim of providing his family with a better future, Graham chooses to capitalise on the opportunity for higher rental returns in the short term and an improved property value in the long run, with a duplex build.

Living together separately

Peter and Debbie have lived in their family home for 50 years but are looking to downsize to something that’s easier to care for. Their only child, Teresa, is struggling to find suitable housing for her young family close to Peter and Debbie so that she can care for them as they age.

Peter, Debbie and Teresa like the idea of knocking down the aging family home and building a duplex home in its place. This will allow Peter and Debbie to remain living independently on one side, where they can retain their autonomy and privacy, while Teresa will live in the adjoining unit where she is close enough to assist her parents should they require it and her children will be able to see their grandparents each day.

Is A Duplex Home the Right Fit for Your Family?

If you’re looking for a big home with a big backyard, stick with a single-family house. However, if you’re looking to maximise the use of land, for a higher income potential or to share the financial burden of building a home with family members, a duplex home could be the solution you’ve been looking for.

Vision Homes builds beautiful, cost-effective duplex homes in the Hunter Valley and Newcastle. Whether you’re looking for the ideal block or considering knocking down and rebuilding, visit our website to see our full range of duplex designs. Alternatively, get in touch with Vision Homes on (02) 49 34 6666 to see how we can help.

Frequently Asked Questions

Is a house better than a duplex?

A house isn’t necessarily better than a duplex; it all depends on your requirements. The main difference between the two is that a house is a standalone building while a duplex shares a common wall.

What is the disadvantage of duplex?

The biggest disadvantage of a duplex is sharing the responsibilities of common areas with another owner. However, if you choose to rent out the second home, you can avoid this problem altogether.

Is it worth building a duplex?

A duplex home is a very worthwhile investment, particularly in urban areas where housing is in high demand.

Will a duplex increase in value?

Duplexes do increase in value; however, sometimes appreciation doesn’t happen as quickly as with a single-family home.