The townhome market is undergoing a transformation. Once seen primarily as an entry point for first home buyers, townhomes are now emerging as a compelling investment option. With a relatively affordable price tag and strong rental yields, they are firmly on the radar for investors – especially in Melbourne’s greenfield corridor.  

Why investors are turning to townhomes  

Greenfield townhomes, typically priced between $500,000 and $600,000, remain more affordable than comparable options in most other states. As Melbourne’s outer suburbs continue to benefit from significant infrastructure investment and growing developer confidence, demand for these properties has surged.  

Invester interest is rising. In 2024, new loan commitments to investors increased by 10%, highlighting a shift. Townhomes are no longer just an affordable alternative – they are a strategic asset offering tangible financial benefits. Strong rental yields, stamp duty concessions, depreciation benefits, and land tax advantages make them a highly attractive option. 

A resilient asset class 

Townhomes have demonstrated resilience during market downturns. Compared to other residential property types, they experience less price volatility while delivering consistent rental income and long term capital gains.  

In a market where affordability pressures remain high, investors and renters alike are looking to townhomes as a cost effective alternative to traditional, detached houses.  

Adapting to market needs 

RPM’s Built Form division is responding to these market shifts by refining strategies to align with both investor and owner occupier needs. We are actively working with developer partners to ensure their products meet evolving demand – whether through innovative design solutions or increasing the supply of single storey townhomes for greater affordability.  

With limited supply in greenfield areas and growing demand for rental supply, townhomes present a compelling investment opportunity.  

This article references findings from our Q4 2024 VIC Greenfield Market Report. Read the full report here.