2017 looks set to be the “Year of the Townhouse” according to statistics provided by research think tank and residential marketing agent, RPM Real Estate.
In the latter half of 2016 the townhouse construction was on the rise, and townhouses seem to be the dwelling of choice for off-the-plan purchasers moving away from an oversupplied apartment market and for developers wanting to mitigate risk.
Demand for medium density dwellings (which includes townhouses) has grown over the last four years, reaching a near record of 33,183 new semi-detached, row or terrace house approvals nationally during the twelve months to October 2016.
Townhome project approvals have seen solid growth (of almost 7 per cent) against the previous corresponding twelve month period, and a significaent 92 per cent increase on the previous low of 17,287 new semi-detached, row or terrace house approvals, which occurred in the twelve months ending July 2012.
“The market has changed,” Marshall White Projects Director Leonard Teplin said. Mr Teplin isn’t alone in predicting that 2017 will see developers and buyers alike favour the townhomes over other types of dwellings.
“As supply outpaces demand and the reality of last year’s foreign investment tax, planning legislation and under valuations set in – developers will increasingly withdraw from the multi-residential market and refocus their attention on an owner-occupier product,” Mr Teplin said.
“Whilst the revenue from townhouses is less, the cost and time associated with developing them is also less, meaning financing is easier to come by.
“Townhouses will also spend significantly less time on market, with the average project sold out within two to three months, whilst apartment projects typically take longer to reach financial close.”
There seems to be ample room for growth in this market, with many developers reinvesting their focus and tapping into wealthy downsizers and retirees with highly curated, premium offerings of 200sqm or more.
Such is the case with Goldfields’ 525 High Street development and Urban DC’s 308 Carlisle St project, where apartments are being sold for up to $3.4 million.
“Boutique development, whether in the form of townhouses or premium high-end apartments will be the preference this year, as buyers become less willing to compromise on inferior layouts, areas and services and seek out properties within the ‘wealth belt’ – for Melbourne this includes Bayside, Boroondara and Stonnington.”
Originally story posted on theurbandeveloper.com