- Some townhouses go for less than $1m
- Western and south-western Sydney seem to have more on offer
- They are often well located, close to good amenities
While house prices have cooled in some suburbs this winter, overall median prices remain high (especially at auction – $1.3m). Perhaps the cooling must sustain for any widespread impact, and in Sydney this is never guaranteed.
So, I’ve been looking at smaller properties lately like villas and townhouses, and I’ve noticed price points well below the city’s typically staggering sales figures.
Take for example, this three bedroom townhouse in Lidcombe that just sold for $970,000, as per the auction results from Australian Property Monitors (APM). Or this two bedroom townhouse in Kingsford which went for $1.17m.
Yes, these aren’t cheap but comparatively speaking they are more affordable than most freestanding houses about town.
You might even go out further from the CBD to say, Gymea (about 25km south), and pick up a somewhat more affordable townhouse like this two bedder that just sold for $655,000, listed by APM.
Could there be more opportunities on these mid-sized homes? If you’re willing to forgo the big plot and double garage then yes, maybe.
“Without question today people need less space than in previous decades,” says chief executive of Positive Real Estate, Sam Saggers. “I think the townhouse is the future of real estate and will support growing families. Particularly as technology leads to space efficiencies.
“The main benefit is their overall appeal. They hit the mark with singles, couples, families and the more elderly – as do villas.”
While townhouses can range from $600,000 to $6m, Saggers likes the greater Bankstown area for its range of prices and choices on both new and old properties.
Bankstown also happens to boast a young and growing population. For example, most people in the area are aged 0-14 years, says the Bureau of Statistics (ABS), which theoretically means there are lots of kids and families around. As of 2015, a significant proportion of people in the area (16%) were also aged 24-35.
West of town
Founder of Destiny Financial Solutions, Margaret Lomas says there are parts of Sydney where there’s a prevalence of townhouses, including Glenmore Park, Kingswood and Quakers Hill. These suburbs are all west of the CBD.
“Townhouses make a good choice for young families, are very well resourced in terms of amenity in the area and often are within transport oriented developments,” says Lomas.
“Whether you choose to live in these areas comes down to your personal lifestyle needs – how close are they to your work and social networks.”
Different criteria apply for investors, however. For instance, buying a townhouse as a stepping stone to a freestanding house can be a trap, says Lomas.
“Once you narrow down an area that has good growth drivers, don’t buy a townhouse instead of a house just because it seems like the cheaper option,” she says.
“In many areas there may not be demand for townhouses, and if you buy one to get into that market it could be that demand from tenants just isn’t there. Ultimately this impacts on your resale.
“When purely investing, you should research the demographics and buy the property type most in demand in that area.”
It’s also interesting to note that some developers are actually targeting townhouse builds, especially in northern suburbs like Chatswood and Lindfield, as per CBRE.
What is a townhouse exactly?
The formats can differ but it’s usually a small home that mimics a freestanding house or duplex, within a larger complex of units.
Traditionally they were multi-floored or terraced, particularly in England. They are often smaller or narrower than freestanding houses and accompanied by a little outdoor patio or garden.
Keep in mind that townhouses come with strata costs. Strata Title allows for individual ownership of part of a property (called ‘a lot’), usually within a privately owned multi-unit complex.
The ownership group or owners corporation typically collect levies from individual unit owners that go toward running the complex. So these fees need to be factored into any purchase.