Apartment disillusionment is driving a new demand for townhouses and developers are starting to take note.
RPM Real Estate says demand for medium-density dwellings, such as townhouses, has increased in the last four years. This has resulted in a near record of 33,183 new semi-detached, row or terrace house approvals nationally during the 12 months to October 2016.
During the same 12-month period, there has been a growth of almost 7 per cent for townhouse project approvals and a 92 per cent increase in the approvals for the same types of property in the 2011/12 financial year.
Marshall White projects director, Leonard Teplin predicts that 2017 will see this growth continue, with buyers and developers favouring townhouses.
According to Marshall White, townhouses are experiencing this resurgence, due in part to the possibility of apartment oversupply, but also due to their affordability and accessibility.
“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.”