‘Not the missing middle anymore’: Townhouse building approvals increase in the ACT

Cranes have filled the skies of a number of Canberra suburbs in recent years with the construction of high-rise apartments, but townhouse developments are also making their mark in the capital, data shows.

According to the Australian Bureau of Statistics, there were 1395 townhouse building approvals in Canberra in 2020, an increase of 21 per cent over the previous year. 

“The number of approvals are almost back to 2016 levels,” said Domain senior research analyst Dr Nicola Powell. In 2016, townhouse approvals were 1557. 

As for unit approvals, in 2016 they were at 3341 before reaching a record high of 4452 in 2018, but that has since declined to 2174 approvals in 2020.

In 2018, property experts called for more townhouse developments, noting that they were the “missing middle” between apartments and detached houses, particularly when it came to housing affordability options.

“What townhouses usually do is offer that affordable living compared to a house,” Dr Powell said. “Over 2020, we saw such strength off the back of economic turmoil unravelling in Australia and the housing market continued to perform well in Canberra. 

“We entered 2021 with record-high house prices so I think it’s important to have a diverse array of affordable housing options in Canberra to help address rising house prices.”

Paul Hamilton of 3 Property Group, who specialises in townhouse developments, said townhouses act as the “middle ground” for house hunters.

“For people wanting to upsize from an apartment but are priced out of free-standing houses or house-and-land packages, they should look towards making a townhouse purchase,” he said.

A spokesperson for Canberra-based developer Amalgamated Property Canberra said “townhouses are not the missing middle anymore”, with many homes being built in Canberra’s newer suburbs including Coombs, Wright, Taylor and Strathnairn.

“You need more land to develop townhouses and these outer-city new suburbs offer that, whereas inner-city suburbs are more skewed towards multi-unit developments with a push towards urban infill,” the spokesman said. 

“Townhouses are also zoned differently from unit developments so sometimes townhouses would be the more suitable option on a certain block of land than units.”

In the last year, demand for townhouses has been through the roof, Mr Hamilton said.

“When the federal government’s HomeBuilder package came into play, that helped a lot of buyers out. Not just in terms of sales but in townhouse developments as well. Last year was a big year for us,” he said.

“Also, as more people worked from home amid COVID-19, homeowners realised they wanted more space, an additional room with an at-home office set-up… and that’s where townhouses filled that void. I don’t think that demand will slow down any time soon.”

The HomeBuilder scheme, which was announced in June to stimulate the construction industry, will end on March 31. As at December 31, Canberra’s take-up of the construction grant stood at 1371.