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Why smart property investors are switching to Melbourne Townhouses.

Why smart property investors are switching to Melbourne Townhouses.

Why are so many property investors turning their focus to Melbourne Townhouses?

 

The steady rise in demand for medium density housing, townhouses, terraces and townhomes has taken hold of the property market since the change in off the plan stamp duty regulations at the end of financial year, June 2017. Investors that were previously solely focussed on off the plan apartment and house & land package property investment expanded their selection criteria to also include townhouses.

Mid 2017 is an important point in time for off the plan townhouse investment in Melbourne.

The Victorian house and land package sales market was at its highest point for many years. If you were trying to buy in a master planned community in the growth area suburbs of Melbourne at this time you would have had to registered and receive either a lottery number to pick a block of land from the land stage release or literally line up which, due to demand, often meant sleeping the night in your car or pitching a tent! Too much effort for no guarantee of being able to purchase your preferred block of land, size or price of land.

Demand for Melbourne off the plan apartment investment post June 30 2017 lessened due to the Victorian government state stamp duty changes in addition to many property investors in Melbourne looking to buy now for investment and move in a few years time when ready to downsize or alternatively the other way around be first home buyers who would then hope to upgrade,move out and this property then becomes their first time property investment. Townhouses are the preferred property investment product for this scenario.

So why invest in a townhouse as a property product category over apartments and house & land?

 

What attracts investors?

  1. Attracts all tenant categories (share house, couples, families and downsizers)
  2. Quicker build time to apartments and house & land package
  3. Comparably less annual body corporate fees (apartments)
  4. Efficient floor plan design equates to not paying for wasted square meter space
  5. Contains a land footprint component
  6. Turnkey inclusions

What attracts tenants?

  1. Zoned living across levels
  2. Less running costs & maintenance (house & land)
  3. Privacy, less interaction with neighbours

Why invest in townhouses in Melbourne?

 

  1. Melbourne’s Population Growth

Population growth is the foundation of every capital cities property market growth and health. More people, more demand. Australia’s population growth is booming reaching 24.6 million as at 30 June 2017, an increase of 388,1000 from 20 June 2016.

Victoria, including greater Melbourne, had the largest population growth in the nation with 144,400, followed by New South Wales with 121,800 and Queensland with 79,600.

Greater Melbourne had the largest population growth with than 125,400 in 2017, an increase of 2.7% and taking Melbourne’s total population to 4.9 million people. Additional growth contributed with migration accounted for 64%, births 29% and interstate migration 7%. Melbourne with 2.7% had the fastest growth over both Sydney and Brisbane with 2% growth each.

 

  1.  Melbourne’s Secondary and Tertiary Education

Education is Victoria’s largest export with over 175,000 international students studying at any one time.  Students are attracted to Melbourne over other capital cities for the number of university offerings and safety and security with Melbourne being the most liveable city for 6 years in a row.

International students generally have above average spending power and being in Melbourne for extended time, 3 year degree or more, the preference for off the plan and built townhouse development product over and above high rise Melbourne CBD apartment product is increasing in popularity.

Secondary School Zones in suburbs such as Balwyn and Mckinnon with excellent academic results increase demand for families to live in school zones which are increasingly targeted by builders and developers as dwelling demand increases in these boundary zone.

 

  1. Melbourne’s Urban Geography & Infrastructure

Melbourne’s geography bounded and divided by Port Phillip Bay, the Maribyrnong River and the Yarra River effectively divides the Western, Northern, East and South Eastern Suburbs into suburbs catchments with unique cultural character and appeal, green parkland and open space supported by amenity but also supporting infrastructure and transport for access to Melbourne’s central business district.

 

  1.  Melbourne’s Culture

Melbourne’s property market is further enhanced as the cultural capital of Australia. Cultural tourism accounts for 32% of Victoria’s 10 million domestic and international tourists with the number of international cultural visitors estimated to be worth $2.5 billion by 2025.

Cultural visitors stay 25% longer and spend 20% more per trip than leisure and business visitors and as an industry generate 8% of employment in Victoria and contribute $23 billion to the state economy.

The biggest cultural tourism draw cards are:

  • Live performances 5.4 million
  • National Gallery of Victoria 2.6 million
  • Melbourne Museum 1.8 million
  • Australian Centre for the Moving Image 1.45 million
  • Comedy Festival 800,000
  • White Night 500,000
  1.  Melbourne’s suburb gentrification

Gentrification refers to the shift in socioeconomic demographic of a suburb which occurs when residents with more money start to move into the area resulting in increased demand for property in the area leading to an increase in prices to buy and to rent. This often occurs in inner and middle ring suburbs where mixed commercial and industrial property often utilized for office or warehouse purposes is transitioned to new townhouse development. Suburbs in Melbourne currently undergoing gentrification with townhouse development include Coburg, Brunswick and Hadfield

Melbourne townhouses then make for a strong investment option. Townhouse developments website has all the information you need to make evaluate and compare options, we look forward to assisting you find a suitable property.

Melbourne’s hottest upcoming townhouse developments.

Melbourne’s hottest upcoming townhouse developments.

The property industry uses the term ‘Hot Spot’ to describe a suburb that is about to, or currently undergoing gentrification. Gentrification ultimately results in increased demand for property in the area, often surpassing supply, resulting in an increase in prices to buy and prices in weekly rent. So a ‘Hot Spot’ rule of thumb is the shortest route to potential capital growth and rental yield gain.

The team at townhouse developments view upcoming townhouse project floor plans on a daily basis, only the best townhouse developments make it through our stringent due diligence to be listed on the website.

A ‘Hot Townhouse Development’ has to meet the following criteria

  • Proximity to amenity
  • Townhouse floor plan design
  • Turn key inclusions
  • Price

 

By proximity to amenity we mean is it within a five minute walk or quick drive to transport, retail, essential services, primary and secondary schools.

Train and tram might be obvious however increasingly buyers are more considerate of the environment, traffic congestion and vehicle operating costs going from two cars to one so proximity to transport is paramount to be considered hot.

Retail & essential services enable day to day life to be contained within the suburb you reside. Supermarket, local cafe, bank, post office to gym and medical facilities ensure that on the weekend you really do not need to leave the suburb.

Primary and Secondary Schools is important again to keep the time taken for the school drop off and pick up to a minimum. School Zones are increasingly driving purchase preference and in suburbs such as Balwyn and McKinnon the school zone underpins demand and price foundation in their suburbs respectively.

Townhouse floor plan design is important from a flow and liveability review. Starting with access, can you access your townhouse easily from the footpath and driveway/parking or garage. Natural light and ventilation to areas that you will spend most of your time in, the living and dining room, kitchen. Does the kitchen layout suit your purposes, if you are an avid home cook you may want the option of a portal island benchtop. The shape and dimension of rooms are important, if the bedroom was a triangle would you be comfortable sleeping on an angle?

Turn Key inclusions means you can move in straight away at settlement. Items to ask about include blinds to windows and if the townhouse has a front or rear garden is it landscaped?

Townhouse inclusions are important from a maintenance and longevity of fixtures and fittings. Historically many kitchens had mirrored splashbacks (wall behind the sink and cooktop) mirrors are difficult to clean and with pots and pans can easily crack so these are now tiles or fabricated glass that are easier to clean and more durable. Similarly, benchtops being marble are porous so sauce spills or red wine would stain and knife on the surface may crack or chip so smart ceramic and forms of reconstituted stone are regarded highly.

It goes without saying that price is our last item on the list for a townhouse development to make the hot upcoming list. Price in any instance needs to be fair market value.

Prices for off market, off the plan, under construction and newly built townhouses are fixed. That is the list price is the asking price, so, unlike an auction where the end price is measured by market demand and perceived market value on any day the price of townhouse developments is done with a little more science and research from comparison of similar designed townhouse product and inclusions in close proximity. Townhouse Developments tracks the pricing, size and number of bedrooms in every development we come across and have a map with the average price per square meter and also list prices updated daily so you can always ask us and we can send you this report.

Townhouse developments has hot upcoming townhouses throughout Australia, when these come available we notify you via our weekly townhouse development project update email and if it is a specific product and in a specific location that you want we will notify you directly via phone and email. If you have been looking for a while and still not found a townhouse that suits your needs feel free to contact us and we can let you know about future townhouse projects.

Townhouse Terminology Explained

Townhouse Terminology Explained

Townhouse or Townhome. You say tomato, I say tomato.
Confusing we know, it would be easier if we could just say apartment or house but somehow the market has got a bit carried away with townhouse development descirptions and terminology so we thought it best to give you a translation.

Townhouse and Land Estates

Townhouse and Land Estates

Australia’s growing population is the driver of urban sprawl, that is, the extension of a city in countryside areas beyond existing suburbs and towns to house the growing population.Townhouse developments design and delivery within growth area land estates and masterplanned communities across Australia is on rise.

Off The Plan Townhouse Investment – Melbourne

Off The Plan Townhouse Investment – Melbourne

Purchasing an off the plan townhouse in Melbourne for an investment property has increased in popularity with consumers over and above house and land packages and off the plan apartments since mid 2017. Townhouse investment opportunities in Melbourne are driven by property investors potential for capital growth and rental yield or rental return, that is, hot spot suburbs for off the plan townhouse investment.

10 Reasons why townhouses are more popular than apartments

10 Reasons why townhouses are more popular than apartments

The popularity of townhouses to live and invest throughout Australia is surging.

In 2011, according to the Census, 9.9 per cent of Australia’s housing stock were townhouses but by 2016 that number had risen to 12.7 per cent, which represented an increase of about 285,000 dwellings.  At the same time, the numbers of houses reduced from 75.6 per cent of stock to 72.9 per cent.

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