Townhouses in demand despite housing activity taking a tumble

Apr 10, 2017
Housing market activity may have taken a slide but townhouses are becoming a popular choice.  Buyers have snapped up 854 townhouses during the first ten months of the year, an increase of 4.4 per cent compared to the same period the year prior.

Townhouse sales may have improved but the demand for detached houses dropped by 3.6 per cent over the comparable period. Houses are by far the largest sector of the sales market however buyer tendencies appear to be changing.

A rising number of house hunters are turning to the more affordable choice of a townhouse. The detached housing market has seen strong prices growth making it even harder for those buyers on a tighter budget to get onto the housing ladder. As house prices rise and land costs are at record levels, the importance of delivering housing at a lower price point is paramount.

Developers and builders have responded by creating efficiencies, housing diversity and keeping the purchase price of homes affordable. The latest ABS townhouse stats have soared annually by 40.5 per cent to 1030 townhouses approved during the first nine months of the year. This is almost an additional 300 townhouses compared to last year. Approval rates are now at the third highest on record.

The supply of townhouses has been rising which has helped to service the growth in demand. Over the first ten months of the year 1089 townhouses were listed on, annually growing by 5.2 per cent, an additional 54 listings.

Despite the rising supply, townhouse prices made a 5.4 per cent gain over the year to reach a median price of $433,000. This figure is sitting significantly below the region’s median house price of $631,500.

Townhouses appeal to a cross spectrum of buyer type. The lower entry price point certainly appeals to those on an entry-level budget. The fact many townhouses offer outdoor space entices young families. Downsizers parting from a larger detached house find that a townhouse offers the privacy and space but importantly with less upkeep than the large family home.

The tendency of buyers to opt for a townhouse has the potential to continue to grow as house prices forge ahead, pricing buyers out of the detached housing market and pushing them to seek more affordable alternatives.

Nicola Powell is a property expert for Allhomes. Twitter: @DocNicolaPowell. The MIX106.3 Real Estate Show, Saturdays, 9-10am.

Source: Domain

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