A New Growth Area

Townhouses are being approved for construction at a faster rate than houses in Melbourne’s growth suburbs.

Figures from the Australian Bureau of Statistics have revealed a 26 per cent increase in the number of approvals for townhouses in Melbourne’s growth areas in the 12 months to March compared to a year prior. There were 1834 building approvals made.

House building approvals in the area increased just 6 per cent to 12,498 in the same period.

Urban Development Institute of Australian Victorian chief executive Danni Addison said there were many reasons more townhouses were being built in the city’s outer suburbs.

Ms Addison said the inner-city often had restrictions on medium density development, which pushed such homes further out. 

“In some of Melbourne’s established growth areas however, there is more opportunity for developers to deliver the range of housing options our growing population wants and needs,” she said. “Townhouses in the middle and outer regions of Melbourne are performing very well, so there’s definitely consumer demand there, and that’s the second key factor influencing growth in the townhouse sector.”

Ms Addison added that the new and low-maintenance homes were attractive to a many buyers now. The rise of townhouses was expected to continue, she said.

“Our Residential Development Index predicts that in the coming years, dwellings other than houses will become the majority of dwelling commencements across the state,” Ms Addison said.

Wolfdene director Jon Atchison said the development group had been adding townhouses to house and land sites in recent years. 

“Three or four years ago, when we first did it, people were still getting their heads around the idea of living in a townhouse in the urban growth areas,” he said.

“It’s now much more accepted.” Mr Atchison said the group had seen buyers being priced out of house and land packages in areas like Point Cook and added a very popular townhouses aspect to their Saratoga development.

He said that today house and land packages in many areas of Melbourne had broken past the $500,000 mark.“And that means for buyers with a $300,000 to $450,000 budget there’s a vacuum that’s being filled by mid-sized products,” he said.

And with continued land price growth and council density requirements driving down the size of allotments for detached houses even at the city’s urban fringe, townhouses would increasingly look to compete with them, Mr Atchison said. This would mean better fixtures and fittings, architectural styling and better quality builds.