Unit Living - A growing preference

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Balancing lifestyle and affordability

31 May 2024

Melbourne's real estate landscape has been adapting to new dynamics.  

 For the second month in a row, Melbourne's unit market, which includes both apartments and townhouses, has outperformed houses, a pattern now visible across most capital cities throughout Australia. CoreLogic's Monthly Hedonic Index shows that Melbourne unit values rose by 0.1 per cent, while houses declined by 0.2 per cent. Over the last three months, Melbourne units have increased by 0.4 per cent, compared to a 0.3 per cent decline in the house market. The median unit value in Melbourne is currently $613,000. 

 Townhouse approvals have increased by 26% compared to previous years, according to the Australian Bureau of Statistics. The 2021 Census revealed that 13% of private dwellings were townhouses, and this proportion is expected to have grown substantially since then. 

 The appeal of townhouse living is driven by factors such as affordability, eco-friendly practices, modern designs, and a balanced lifestyle. People are seeking out townhouses across Melbourne and Victoria for their efficiency, innovative designs, and sense of community. 

 Townhouses offer as much space as a typical home on an 800m² block, but without the same price tag. They are built to the latest energy efficiency and technology standards, featuring solar panels, EV chargers, and induction cooking—amenities rarely found in the existing housing market. Buyers can also customise layouts and save on stamp duty. 

Melbourne's growing population and diverse influx of new residents create a demand for varied housing options. With inner-city locations imposing stricter limits on new constructions, middle and outer regions are becoming popular for new townhouse developments. This reflects the preferences of individuals attracted by the financial benefits, innovative design, and efficiency of off-the-plan townhouse offerings. 

 Astute buyers recognise that now is the most affordable time to own a brand-new townhouse. Various factors such as labour shortages, supply chain issues, and high land demand are driving prices up. If buyers don't meet current prices, developers will not build more new townhouses, leaving the market with outdated, non-compliant properties. Consequently, prices for new constructions are likely to increase in the future due to supply and demand dynamics. 

In summary, new townhouses present a range of compelling benefits for homebuyers: 

 - Long-term peace of mind with minimal maintenance and repairs 

- Sustainable development, energy efficiency, and eco-friendly features 

- Personalised living space with customisable layouts, finishes, and upgrades 

- Transparent pricing that provides financial clarity 

- Financial incentives such as stamp duty savings and first homeowner grants 

- An extended savings period during construction 

- Potential for capital growth as the property value appreciates to settlement time 

- The comfort and convenience of brand-new living spaces tailored to your needs 

The architectural design of new townhouses in Victoria is versatile and accommodating, catering to the needs of families, young professionals, and downsizers alike. Families appreciate the spacious layouts and proximity to amenities, while young professionals value the modern features and easy access to public transportation. Downsizers find townhouses to be the perfect compromise, offering a low-maintenance lifestyle without sacrificing comfort and privacy.  

 This diverse appeal, combined with the emphasis on sustainability and energy efficiency in new townhouse developments, aligns with the growing eco-conscious mindset of buyers. As a result, the unit market in Melbourne and Victoria is set to play a significant role in meeting the varied housing needs of residents, offering an attractive combination of affordability, convenience, and modern design.