Read This Before Buying a Studio Apartment

A studio apartment is characterised by being one single space, rather than being divided up into various rooms. The difference between a studio and a one-bedroom apartment is that there are no walls that separate your bedroom, living room, kitchen and laundry – except the bathroom. The appeal of these smaller properties is that they are often situated in the heart of Australia’s capital cities and offer an incredible inner-city lifestyle.

A potential issue with a studio apartment is that their size can restrict the home loans you can obtain. As they are smaller than a standard one-bedroom apartment, some lenders may not approve loans for properties less than 40m2. This means you may not be able to get a mortgage with your preferred bank. Some lenders will insist that you pay the full 20% deposit – the positive of this is that the property is cheaper, making it quicker to save a deposit, and you will avoid mortgage insurance.

First home buyers may be tempted by a studio apartment as it is an affordable way to enter the market in a location that would be otherwise out of reach. You need to ensure that you are comfortable living in such a small space – for young singles who work long hours or have a lot of hobbies that take them out of the house, this may not be an issue. However, if want to do a lot entertaining, you may want to wait a few years to save for a larger home. Another option could be to live in your studio apartment short-term, and then retain it as an investment property as you move onto a larger home.

There is high demand for studio rentals amongst some demographics – for example, businesspeople looking for a base to work from during the week or international students who have moved without many belongings. As a studio is relatively affordable, you will also benefit from comparatively high yields.

To summarise – studio apartments are an affordable entry point to inner-city living, but you may need a 20% deposit and to shop around for a willing lender, depending on the size of the studio. If you want to further discuss your options, you can reach our Customer Success team via phone at 1300 403 204 or message the team at We look forward to helping you achieve your Smart Home Deposit Goals!