- The niche is attracting buyers from downsizers to upsizers and more
- The latest records for luxury townhouses came in at just under $5 million
- Relative affordability, convenience, and more are drivers of townhouse appeal
Terraces or townhouses have risen in popularity across Sydney’s most exclusive suburbs.
Becoming the property of choice for foreign buyers, upsizers, and downsizers, townhouses are proving to be a welcome middle ground for a niche sector of Sydney’s housing market.
The Goldilocks zone for upsizers and downsizers
Plus Agency’s General Manager, Peter Li, said “Buyers are evenly split among foreign residents avoiding land tax, upsizers priced out of houses, and downsizers who want less to maintain.”
Downsizers are attracted to the balance luxury terrace housing strikes between providing excellent amenities, space for grandkids to visit, and low upkeep.
“A lady who came to my office on Sunday looking for a property spent most of our conversation explaining how much she hates the maintenance on her house. She hates the lawn mowing, the pool cleaning, the gutters, the garden, and having to fix things. She’s a classic example of a terrace buyer.
Peter Li, general manager Plus Agency
On the flip side, luxury terrace housing also appeals to upsizers, Li said terrace housing provides a more affordable option for premium locations like Vaucluse:
“These [upsizers] are families in their mid-30s with children who need space and want the feeling of their own home but can’t afford a large house on a large lot.
“In Vaucluse, an older 300SM, 4BR house with 600 SM of land will cost $7 to $10 million. A brand new ultra-luxury townhouse in Vaucluse with a little bit of water views will cost $4 to $5 million.”
Another benefit of luxury townhouses in exclusive locales like Vaucluse and Lindfield includes reduced exposure to tax, said Li: “The NSW land tax and the Foreign Owner Surcharge combine to be 5.6% in 2023. You pay this total on your land value if you live in Australia for less than 201 days this year. Many foreign buyers are Australian permanent residents who live part of the time in AU but spend more time in their home country because their business is there.
“Their holding costs are very high. For a $6 million house in Mosman, you can estimate the land value at about $3 to $4 million dollars, meaning a 5.6% land tax plus surcharge of nearly $200,000 dollars. On a $3 million terrace, by contrast, the land value might just be $500,000, and the tax plus surcharge would be less than $30,000. You can buy a Maserati with the savings.
The multi-million dollar price tags set by townhouses certainly seem justified, with features including biometric door locks, EV chargers, super-premium finishes, custom-tailored floorplans, smart home features in just about every room, and more.
Examples of these well appointed townhouse properties include:
- Deluna Residences in Lindfield,
- Wolseley Eight in Lindfield,
- Sunfield Residences in Lindfield,
- The Origin in Killara, and The Vaucluse collection in Vaucluse.
Record terrace home prices are higher than some normal houses
The Upper North Shore terrace price record was previously $3.55 million, set in November 2021 for a residence at Deluna Residences.
The current record stands at $4.7 million for Wolseley Eight – two of the most expensive homes sold within an hour at the Wolseley Eight launch event.
Buying sight-somewhat-unseen was also a feature of the sale – one buyer from Hong Kong closed after only viewing the property via video call.
The latest SQM Research data shows Lindfield (2070, which includes two other suburbs) has 65 properties listed in total, with the stock on market varying over the past few years between a low of 41 properties and a high of 103 properties.
Asking prices for Lindfield (2070) have also been steadily rising throughout the pandemic. When Covid first hit Australia, prices in Lindfield were above $1.8 million, with units (including apartments, and others) were close to $800,000.
The latest SQM Research figures show the weekly asking prices for a house in Sydney had a November 2022 high of $3.77 million, with units currently around $845,000.