Greenfield Townhomes Townhomes are paving the way to the great Australian dream

Despite the significant cash rate increases since May 2022, median house prices have managed to avoid the initially anticipated decline in price. This resilience has been supported by reduced listings, resulting in the persistence if relative demand pressures, and limiting opportunities for prospective buyers at an individual dwelling level. This has been further exacerbated by the hefty increase in mortgage rates; significantly reducing borrowing capacity, and in turn, purchasing power.

Across the nation, households (especially first homeowner households) are navigating higher cost of living, grappling with reduced savings, and facing challenges accumulating a deposit – all factors reinforcing the need for more affordable housing solutions.

Backdropped by the current economic climate and housing challenges, townhomes continue to stand tall as the nontraditional housing option that balances buyer preferences and affordability concerns.

Townhomes not only cater to the deepening affordability constraints but also offer lifestyle features comparative to traditional detached houses with modern – and often more sustainable – amenities. These house-like dwellings, generally with a separate title and individual secure parking, come at a compelling price point that resonates with price-sensitive buyers. In fact, over the last few years, townhomes have cemented themselves as a pathway into homeownership in the face of rising challenges.

Households on a moderate income between $80,000 to $120,000 (for a couple without dependants) can still get a foothold into the property ladder despite the challenges of the larger economic landscape.

As the market dynamics continue to evolve, townhomes remain strong as the bridge between housing choice and buyer desires. Their steadily increasing popularity demonstrates that townhomes are a pivotal element in the market – offering the great Australian dream on an affordable budget.

• Cash rate sits at 4.1% (August 2023)

• Cash rate has risen 400 basis points from historic low of 0.1% in April 2022, and 225 basis points from August 2022

• Major banks have forecasted that rates have likely peaked

• Inflation appears to have peaked but remains elevated

$80,000 household income Couples without dependants

Borrowing

$120,000 household income Couples without dependants

Reduction: $132,900

** This considers a household with average expenditures as defined by the Household Expenditure Survey (HEM).

The data is a sample of sold and on-market townhomes recorded through Q2 2023. The Couple without Dependants household income band of $80,000-$120,000 has been selected based on RPM’s knowledge of townhome purchasers active within the market