Townhouse Builders Melbourne
Townhouses are becoming more popular with young people who want to live in cities with more job and population opportunities. Many developers are considering the subdivision of property and the development of townhouses to increase land value.
What Is A Townhouse
A townhouse is a residential property that generally shares a wall with the townhouses next to it with shared land between the dwellings. These homes typically have 2 to 3 floors in more modern designs.
Townhouses are an affordable solution to the desire for increased floor space in high-density metropolitan locations such as Melbourne. This trend is in direct response to the present-day demographic seeking rental opportunities. A recent ABS study shows that from the mid-80s to 2016, family households dropped from 77% to 70%. Additionally, single-person homes have subsequently increased by 5%.
This study reflects the modern standard of living. Younger generations are looking for homes that have the benefits of both a suburban lifestyle and an inner-city lifestyle.
The townhouse comes with the perk of owning the land it’s situated on and the exterior and garden features. You’ll share communal areas and maintenance decisions with the local homeowners’ association. Homeowners’ Associations typically require a monthly fee for community upkeep; they also enforce overall aesthetic property standards, ensuring property value protection.
These associations can be very beneficial to first-home owners, as they can help reduce financial risk and overall responsibility. Townhouses are also an attractive investment for banks due to the lower financial risk of establishing a new townhouse. This is due to the lower price point associated with developing a new townhouse compared to free-standing, previously established homes.
Overall, townhouses are economical, high-value properties offering easily maintained housing solutions in high-density areas. Other metropolitan residential buildings are usually more expensive because they are built on larger plots of land in competitive markets.
Are Townhouses a Good Investment?
A townhouse is fantastic investment property due to its high demand amongst two large buying demographics, young families and retirees. Due to rising real estate demand and prices in Australia, entry into the property market can be challenging for young families.
Young families typically seek 2 to 3-bedroom homes in safe, well-known communities. This goal is much easier to achieve and more affordable when buying a townhouse. Townhouses check all the boxes, providing affordable well-sized housing for young families.
Retirees typically want a smaller, easily maintainable home once their children have grown up and moved out. Townhouses are perfect for this demographic, with enough rooms for a guest bedroom, office, and master bedroom. They are also small enough to upkeep comfortably in the later years of life.
Cost to Build a Townhouse
The monetary entry level for building townhouses is extremely affordable for a land investor or developer. According to the BMT Construction Cost Table, the largest-sized townhouse with a high-quality finish would cost around $3,625 psqm to build. This figure can be compared to the smallest apartment walk-up complex possible, with a similar finish, totalling $3,684 psqm.
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Two-Storey Townhouses To Maximise Floor Space
Townhouses are becoming increasingly popular due to the trend towards two-storey development, which maximises property value and utility. An increase in living space provides considerable value to potential tenants. It also increases street appeal by showcasing the property’s architecture within the neighbourhood.
Two-storey properties are also a good choice in cityscapes as they offer access to better views and more privacy. Designing a two-storey townhouse also allows for potential garden or lawn options to maximise land space. This is perfect for tenants who want a home closer to the traditional white-picket fence development.
Finally, two-storey townhouses are a great opportunity when considering land development through subdivision. This is because they offer additional value to the land and greater floor space provided to prospective tenants.
Building Townhouses For Rent
Average rental prices for units within the last quarter in Melbourne, average at $430 a week with prices ranging from $350 a week for a one-bedroom up to $550 a week for a three-bedroom unit, according to market insights from REIV.
Apartment or Townhouse in 2023 For Owners Corporations?
Strata Consultants’ research shows that newer townhouses average $400 weekly rent, compared to only $380 for older apartments. This shows that investing in newer rental properties can be much more lucrative. This data, including consideration given to estimated owner-corporation fees, indicates a better return on investment for townhouses than apartments.
According to the ABS Lending Indicators report, the average Victorian mortgage totals $639,741. Using the realestate.com mortgage calculator, we can calculate that depending on your loan term; you could be paying between $2,536 to $5,010 a month for a 10 to 30-year mortgage loan with 5.00% interest. At the estimated selling price of $735,000 for a newer townhouse, mortgage repayments would be between $3,206 to $6,344 monthly for the same period with a 5.00% interest rate.
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Townhouse Resale Value
Townhouses are valuable in both resale and rental capacity, with current projections estimating a resale value of $735,000. Considering Melbourne’s present property market projections, these estimates bode well for the Victorian market’s purchase and development of townhouses.
The Melbourne property market remains a surefire investment with a 40-year average price increase of 7.73% per annum for units/apartments.
Best Townhouse Builders Melbourne
Townhouses are a modern and economical way to meet the demand for housing in high-density property markets. Townhouses offer a higher quality of living than apartments, with more space and access to amenities. Townhouses are smaller and more livable than traditional houses, making them a good solution for young families and retirees. They often have private outdoor areas, which makes them even more desirable.
Townhouses offer lucrative investment opportunities for those looking to subdivide and maximise land efficiency. They provide a stable rental market and minimal risk with the inclusion of body corporate associations. Body corporate also provides peace of mind that your asset is protected and maintained at a fair fee. Townhouses are ultimately a fantastic solution on offer to the Australian community both in terms of investment and rental opportunities.
Our team at Forme Homes pride themselves on providing quality townhouse developments and luxury townhouse solutions as a custom home builder. If you’re currently seeking out a townhouse builder, please get in touch with us today. We’ve provided some commonly asked questions and answer below to help you get to know us better.
Do you have a VIC Builder’s Licence?
Yes, we do; all reputable home builders are required to have a Builder’s Licence. Always remember to use the VBA’s Practitioner Search tool if you are ever in doubt of a builder’s credentials.
How much experience do you have?
Forme Homes has over 50 years of building experience and expertise in top residential construction companies.
What will my construction timeline look like?
At Forme Homes, we provide each client with a personal timeline and budget plan, ensuring thorough communication along the way. This timeline can vary project by project but will be established during planning.
