Our Q1 2023 Greenfield Market Report shows that current economic conditions are placing increasing pressure on buyers. Exceptional rental growth, higher cost of living and interest rate increases have reduced the market range many prospective buyers can participate in.
Townhomes are an avenue to ownership amid these lingering challenges. They represent an opportunity for prospective purchasers to gain access into the housing market at a more affordable price point, without sacrificing house-like amenity.
The benefits and opportunities for this product are as evident in the greenfield areas as they are in the metropolitan region. Still elevated land prices and construction costs limit some budget conscious purchasers, with townhomes emerging as a legitimate option for these buyers.
Even with considerably reduced access to finance, households within moderate income bands ($89,631-$134,450, as defined by the Victorian Government) are able to afford townhome products.
While the potential for reduced interest rates over the coming year may offer a reprieve to some buyers, a cash rate growth reversal comes with its own challenges – inflating capital prices and impacting affordability from a price-point perspective.
There are signs the established housing market is either at or approaching its pricing floor, with potential for stability in pricing to precede another growth curve. In this context, townhomes will remain a compelling option for many buyers. In fact, provision of product diversity with varying price points, with townhomes a key factor in the mix, is critical to keeping the dream of home ownership alive for many Australians.
This article references findings from our Q1 2023 Greenfield Market Report. For the full report, click here.