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A townhouse is a multi-storey terraced residence. They share walls with the home(s) on either side but have their own front door. 

The main benefit they offer over detached houses is they are usually cheaper- the savings from those shared walls get passed on to you! Many also prefer the closer sense of community they can offer (boosted further by the ones that include playgrounds, swimming pools etc. in their common areas).

Costs associated with building a townhouse include the price of purchasing the land, builders and labour costs, construction cost, the cost to demolish or rebuild any existing structures on the land (if applicable), council fees, landscaping, and decorating.

From building costs to materials, insurance, and design, in this article, we explore how much it costs to build a townhouse in Australia.

The Average Cost of Building a House in Australia

We’ll detail later in this article all the factors influencing the cost of a townhouse build, but as a rule of thumb, a basic finish townhouse will cost you in the region of $2,530/square meter; a higher-end finish, closer to the $2,910 mark.

With the average size of a townhouse being around 150 square meters, this gives a rough price range of $380,000- $437,000. 

But, these can only ever be averages, as many variables can have an impact. 

One is Melbourne’s status as one of the world’s most popular cities to live in. And when demand outstrips supply, prices inevitably rise.

The exact costs associated with the pandemic are still unclear, but what is clear is that it too has driven prices up (volatile exchange rates and supply chain issues being two of the main reasons).

The end result? It’s not uncommon to see townhouses sell for over a million in some of the city’s more sought-after areas! Averages land closer to $700,000.

Factors Affecting Cost of Building a Townhouse in Melbourne

Aside from the enduring popularity of the city itself affecting the cost, they vary between suburbs, as well as within the broader area. “Location, location, location!” holds true, as ever, but the average cost of building a townhouse can be affected by many factors. The most common ones are:

• size of the house
• quality of build
• accessibility to transport
• site consideration
• desired time of completion
• the complexity of the construction project
• builder and labour costs

Let's explore each one in greater detail.

Size of the House

The size of the property greatly impacts the price of the entire house-building project in Australia. It’s common sense: the bigger your new home, the more materials you'll need, and the bigger the budget.

According to the Urban Development Institute of Australia’s 2021 State of The Land report, Melbourne’s median lot price was $319,000 (with Sydney at $495,000!).

Quality of Build

The average cost of building a house in Australia also depends on the materials' quality and how good it looks when finished. If you want that high-end finish or custom build, you’ll have to pay for it!

Expensive finishes require better workmanship, which will increase the costs of materials and labour. On average, plan to spend around $2,500 per square metre for a top-quality build.

Location and Accessibility to Transport

The cost of building a house also depends on the property's location, transport links, local schools, etc. All of these have a significant impact on the desirability and, thus, the price of property there. 

Site Consideration

Site costs such as utility connections, fences and surveys will impact the price.

Then factors such as the slope of the land, soil conditions, and how flood-prone the area all affects the building costs. Sites with poor soil quality, significant sloping or areas prone to flooding will result in higher building costs.

Desired Time of Completion

Construction can take anywhere from a few months to over a year, depending on which state you live in and other factors like site conditions and local laws. However, the desired time of building a property can also affect the construction cost. If you need your new house sooner than the average completion time (6-12 months), you CAN get super-fast builds, but you will pay a premium.

The Complexity of the Construction Project

The build cost of a home in Melbourne is also affected by the complexity of the construction project. For example, building three-level townhouses is more complex than constructing the average 2- or 3-bedroom home. 

More time + more materials= higher price.

Builder and Labor Costs

Your construction costs will also depend on the service provider you choose. Do some research beforehand on which companies can provide a better value for money. But, “you get what you pay for”, my old man never tired of telling me. And I think he was onto something. 

Skimping on build costs can be a false economy.

When researching property development companies, always consider reviews from past customers. And, when it comes to the pricing, a full-time builder will charge around $75 per hour on average.

Keep reading to find out which other costs to expect besides these most common development and build costs.

Additional Costs for Building a House in Melbourne, Australia

Building a house doesn't only include buying the materials and paying the construction workers. You also have to watch out for some other costs people usually don't consider when planning their budget for constructing a house.

Land Cost

The median price per square metre of land in Melbourne is around $900. This cost may vary depending on factors such as location, size of the plot, and whether you're constructing over an existing structure or not.

Land price accounts for about 10% of average house building costs in Australia.

Stamp Duty

The price to build a property in Australia also depends on local state tax laws. Stamp duty is a fee you have to pay when purchasing a new property, and it's calculated as a percentage of the land price or transfer value.

One of the COVID-19 pandemic’s rare silver linings is that it has led many states to offer significant discounts on their stamp duty.

Permits, Licenses, and Legal Fees

You will need to apply for permits to build any kind of structure.

Depending on the size and complexity of your project, you may also have to take care of the related legal fees, licenses, and other related expenses.

For example, if you plan to build a pool or install an air conditioning system in your new house, you need to get the relevant licenses. Something else to keep in mind when organising your budget for building a property.

Site Preparation

Even before you start building, you will need to make some changes to the site. If the property's current owner has hired a landscaping company, there may be additional construction costs for demolitions and clean-ups.

If you don't want to use the services of your average builder but instead plan on taking care of all these tiring tasks yourself, you need to add site preparation costs on top of the average cost to build a new house.

Now that we've covered the average cost of construction and all the other potential fees let's focus on townhouses and their costs specifically.

How Much Does It Cost to Build a Townhouse from Scratch?

A townhouse is a property that has more than one floor. It includes at least two bedrooms, has its own front and back door, and the backyard is shared with the other townhouses in your community.

You can expect average construction costs of $2,720 per square metre for building a brand new townhouse in Melbourne. But- and I’m sure you can guess what's coming up!- that’s only the roughest of averages. Prices can vary wildly according to the quality of the finish, the popularity of the location and the rest of the factors we went through above.

If you plan to build a townhouse in a new housing estate, you shouldn't expect any additional costs.

What Are The Costs for Townhouses by Australian Cities?

Are you interested in a confident price of your new home? There are cost calculators available online to help you estimate a close cost of the property you are planning to build.

How Can Riser Bespoke Builders Help You?

Father-and-son team Jeff and Logan Wang are at the heart of Riser Bespoke Builders. Founded in November 2014, Riser Bespoke Builders now builds 55+ homes a year. The company has 22 full-time employees, 35+ proven and trusted subcontractor teams, and new facilities in South Yarra.

Riser Bespoke Builders offer free consultation calls and will help you get a cost estimate in less than a minute!

The sheer durability of Colorbond roofing has seen an explosion in popularity in recent years. But that resilience is far from the only thing they bring to the table (or, indeed, the roof!).

Here's a lowdown on their main advantages as an option for restoring or replacing your roof...

Durability

We'll start with what you already know- they're tough! It has been tried and tested in some of Australia's harshest conditions.

In high wind conditions, they are the best roof material there is.

Snow slides right off, so there are no worries about any potential added weight jeopardising things.

And the fact it is termite-resistant is an added bonus too.

Cost

Cost is rarely far from the equation when considering your options- especially when your home will be setting you out a few bobs even at the best of times!

So the fact that Colorbond is cheaper than alternatives such as fired tiles (especially when installation and maintenance are factored in) is another plus point.

VERY low-maintenance

The colour is quite literally bonded to the roof (what gave it away?), so it won't need re-painting as much as other metal roofing—saving money and time.

Its baked-on finish makes it much less prone to the usual wear and tear of chipping, cracking etc.

Environmentally Sustainable

The steel Colorbond is made from is 100% recyclable. To add to its environmental credentials, its lightweight makes it more energy-efficient to transport, and as its delivered pre-cut to the building sites, there is less on-site wastage.

There now. Doesn't that help you sleep better at night?

Excellent Thermal Insulative Qualities/ energy efficient

Colorbond's Thermatech technology harnesses their reflective power to bounce heat away from the house again, keeping the cool and letting your AC do its job without added pressure from up top.

It works to insulate your home throughout the seasons- radiating less heat into the home and making it easier to cool down at night. With better home insulation, you could also see the impact on your reduced energy bills.

Fire-resistant

If your area is prone to bushfire, then Colorbond over tiles is a no-brainer. It's not only fire-resistant but also much easier to seal the corrugated sheets against flying ember and burning ash.

Leak-resistant

While roof tiles absorb water, Colorbond allows it to run off easily and quickly, without pooling. The result is a severe de-risking of any leakage.

They're quiet.

Metal roofs can be noisy, especially under a barrage of rain. With simple acoustic covering, you can ensure the only thing waking you up at night is that 3 am trip to the toilet.

Weight

Colorbond can be as low as light as 10% of terracotta or concrete. This reduces installation costs and puts less pressure on the roof support structure. Without water absorption, there is less fluctuation in weight too.

Stylish

After all those practical considerations, let's end on a more aesthetic one- Colorbond roofs come in a range of colours that let you complement your home's colour scheme more easily. The result? A neat, thoroughly modern appearance.

Colorbond's host of practical benefits shows that it is much more than just a rock-hard, cost-effective alternative to tiles, concrete, asphalt, etc. For these reasons, it should be high up everyone's list of options when it's time to make their choice.

There was a time- not too long ago- when the single dwelling house was the default choice for buyers everywhere—families, especially.

But times change with the seasons, and the last decade has seen a shift in buyer behaviours as demographics change, and with it, their priorities.

The townhouse has emerged as a real threat to the enduring popularity of the single dwelling. If you are wondering which is the best choice for you, this article breaks down their respective pros and cons.

Townhouse compared to single dwelling: definitions

Townhouses are multiple dwellings under one roof that share a wall.

Single dwellings are, well, as the name suggests- single dwellings, be it in a detached or semi-detached property.

Now we have the basics out of the way, how do they stack up?

Townhouse pros and cons

The plot and build of a townhouse may be more expensive than a single house, but with several dwellings on just one plot of land, they work out significantly cheaper than two houses. And they provide multiple incomes from a single asset.

They are typically built near amenities and transport links, so the location can be a huge draw for investors and renters alike. Upkeep is cheaper than houses too; another attraction for potential renters.

However, capital growth is typically smaller than that of single dwellings.

Pro's

• cheaper than buying two houses: two rental incomes from one asset
• locations are popular with investors and renters
• come with modern amenities
• social benefits to townhouse living, but with a decent level of privacy too

Con's

• less space than a single dwelling (usually)
• multi-levels can be an issue with the elderly or less mobile
• typically less capital growth than single dwellings

Single dwelling pros and cons

Single dwellings have been the go-to for families (especially young ones) for years. And it's easy to see why.

They are usually in the suburbs, spacious, with garden space for the kids and (relative) privacy.

However, this space and privacy does come at a cost as land rates, utilities, insurance, and maintenance is higher than in townhouses.

Pros

• more space
• more privacy
• often easier to finance
• better capital growth potential

Cons

• more expensive to buy- costs to live in popular areas can be hefty
• more expensive to maintain
• less potential rental yield than a townhouse

The verdict

Which property is best for you will depend upon your particular circumstances and priorities.

If you are looking at it as an investment, then it boils down to whether you are prioritising capital growth (which favours single dwellings) or rental yield (which favours townhouses).

If you are looking to live in the property yourself, you will want to factor in things like the location you want for you (and your family, if you have one) and- lest we forget!- your budget.

We hope this guide has helped clear up the differences and distinctions between the two and helped move you one step further along the journey to finding your dream home!

There has been a significant shift in Australia's homeownership market in recent years, as I'm sure you've noticed. Gone are the days of 2.4 children and the white picket fence. Nowadays, more and more are choosing to invest in townhouses instead, and there are many reasons why.

The most notable is their relative affordability compared to houses and a shift in demographics- people are having children older, having less of them, and prioritising a low maintenance lifestyle with closer proximity to amenities and the workplace.

But are townhouses a good investment?

As well as your overarching investment strategy, your plans for the house will decide whether you choose to make your investment here (as opposed to a house or an apartment).

This blog will walk you through its pros and cons.

Pros:

The cost

We've already touched on this in our introduction, and it's the key driver in the decision-making process for many property investors.

Townhouses are generally cheaper than houses, making them a popular and affordable entry point into the market for young families, professional singles or couples, and downsizers.

They offer a favourable trade-off between the benefits of a house and an apartment- cheaper than detached houses but bigger than apartments.

Lower up-keep

The smaller size of a townhouse compared to a house is reflected in its lower maintenance costs. Their yards are often simpler and smaller too- cost-savings that add convenience and appeal, especially if you plan on listing on the rental market.

Market appeal for tenants

We have touched upon some of these points above: the lower maintenance, proximity to amenities and modern designs of townhouses attract quality tenants and give the properties high tenant market appeal.

Of course, local markets can vary, so you still need to do your homework on their respective supply and rental rates.

Common property depreciation

Townhouse investors can claim depreciation on a property and its assets: the structure, fixed assets and other assets they own in the property, i.e. kitchen appliances. Everyday property items can be claimed for too- such as garbage bins, security cameras and any driveways that link the townhouses.

Privacy

Although they often now come with common amenities (swimming pools, parks etc.), they don't have any shared living areas, so they boast much of the same privacy of the house.

Space

Townhouses are often split into 2 or 3 floors, offering more space than most apartments.

Modern amenities

With the explosion in their popularity as a relatively modern development, most come with the trappings of modern conveniences, such as ensuite bathrooms and open-plan living.

More relaxed bylaws

While townhouses still need to adhere to local bylaws, these do tend to be more relaxed than those for apartment buildings, and it's less likely you will have to pay body corporate fees.

Cons:

You're part of a strata scheme

As part of a strata scheme, there are restrictions on how you can update the property- you'll need to get any improvements approved first. However, this isn't so much of an issue if you are investing as a rental property, as simple repairs are usually fairly plain sailing through the strata approval process.

Lower rental returns

Townhouses often have lower rental yields than freestanding homes, though the lower purchase price and maintenance costs counterbalance this. Still, it would be best to size up these factors when choosing where to invest.

Resale values

Historically, the capital growth of freestanding houses exceeds those of townhouses. Though these market waves are also subject to fluctuation, so there are other things to bear in mind before you invest- specifically, where these lie when you are looking to buy.

Space

Townhouses usually have smaller square footage and outdoor space than freestanding houses.

Price

Although cheaper than a detached house, townhouses are often more expensive than apartments.

Less individuality

The nature of townhouses means they are often built with the same layout and design as neighbouring buildings and are less bespoke than a house.

Stairs

Usually over 2 or 3 floors, townhouses may not be best suited for the elderly or people with mobility issues.

Conclusion:

Whether a townhouse is the best investment property for you will depend on several factors, such as your budget, what you want from the investment (rental yield or capital growth), if you are planning to be owner-occupiers or landlords, and current property market conditions.

But with the changes in the composition of society, our habits and our demands, their popularity as living spaces certainly show no signs of abating.

If you do choose to make your investment in a townhouse, here are a few things you should prioritise:

1. Proximity to local retail, public transport, schools, and parks.
2. Versatile floorplans that cater for downsizers, families, or young professionals.
3. A design that lets in lots of natural light to living spaces and bedrooms.
4. Lots of storage space and options.
5. What common facilities it has, and whether they appeal to you or prospective tenants.
6. Whether the type of title (strata, community or freehold) suits your investment needs.

A final word of advice is to check whether the advertised price of the house and land packages is up to 'turn-key' standard, to ensure there are no hidden surprises and extra costs with landscaping etc.