Melbourne’s townhouse market has exploded. New townhouses now account for 35% of all new residential stock. But is a townhouse actually a better investment than a traditional house? GeeVee runs the numbers.
Head-to-Head Comparison
| Factor | House (detached) | Townhouse |
|---|---|---|
| Median price (inner-north) | $1.42M | $985k |
| Rental yield | 2.8-3.5% | 3.5-4.5% |
| Land content | High — drives long-term growth | Low-medium — shared land |
| Body corporate | None | $1,200-$4,800/year |
| Maintenance | Full responsibility | Shared external, individual internal |
| Depreciation | Limited (older stock) | High — new builds maximise deductions |
| Capital growth (10yr) | Higher — land content drives growth | Lower — limited land, more supply |
| Tenant appeal | Families, long leases | Couples, professionals, shorter leases |
GeeVee Verdict
Houses win on long-term capital growth due to land content. Townhouses win on yield, depreciation, and entry price. For pure capital growth investors: buy houses. For cash flow investors or those wanting higher depreciation: buy townhouses. The real hidden gem sits between both — a block of units on a large land holding, which combines land content with multiple income streams.
Find off-market houses, townhouses and blocks of units: collings.com.au/portal
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