Thanks to the duplex residential building, it's possible to build two homes for the price of one on a block of land. Here's what you need to know about duplexes, from insurance to strata fees.
Buyer
What is a townhouse and do you pay strata fees?
A townhouse could be the perfect choice if you're downsizing from a traditional home or moving up from an apartment. Whether you’re a first-home buyer, investor, renter or a long-time property owner considering your options, here’s a handy guide to townhouses.
Townhouses have become a popular option for buyers and investors, as well as renters, in Australia as issues such as housing affordability and modern lifestyle preferences take the focus away from traditional freestanding homes on a quarter-acre block with a big backyard.
Whether you’re downsizing to a dwelling that’s easier to maintain or upsizing to a home with more room and privacy compared to an apartment – yet more affordable than a standalone house – the townhouse beckons as a worthwhile consideration at the middle ground.
A townhouse can bring many advantages but some downsides, too, including the need for owners to pay annual fees if it’s a strata title, so let’s take a closer look.
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Townhouses often have two or three storeys, making efficient use of the available space. Image: Getty
What is a townhouse?
According to the Real Estate Institute of Victoria, a townhouse is a type of residential property that typically refers to a multi-storey dwelling that shares one or more walls with adjacent properties, often forming part of a row of similar houses.
Townhouses are popular for their efficient use of space and are commonly found in urban areas. As part of a planned development, they often have similar architecture and may have shared spaces, such as driveway access, gardens and barbecue areas.
What is the difference between a townhouse and a duplex?
A duplex is a residential building containing two homes that share a common wall and tend to have separate entrances and outdoor areas. They are usually limited to two homes divided by a single wall, often on a single block of land.
Townhouse developments might comprise several rows of homes across multiple blocks with common spaces.
More: What is a duplex and how do you insure one?
What are the benefits of a townhouse?
A townhouse can appeal to people who are downsizing from a traditional standalone house, as well as those who want to move up from a smaller dwelling such as an apartment.
As a multi-storey dwelling, townhouses represent a significant move up from a single-level apartment, offering more space over two or sometimes three storeys.
Modern townhouses often have a contemporary design and appealing features such as an open-plan layout with high-level amenities, including ensuites.
Depending on the site, they can offer higher levels of privacy compared to apartment blocks, providing occupants with separate entrances, garages and private courtyards. There may be less maintenance compared to a freestanding home on a larger block, and given most townhouses are part of a strata scheme (see below), the owners’ corporation should be responsible for maintenance of shared areas.
Townhouses are also often found in desirable locations – close to parks and beaches, for example – and tend to be more affordable than houses, especially in such sought-after locales.
As such, the townhouse might also become a real option for first home buyers who are unable to afford a traditional freestanding house in their preferred location.
Modern townhouses can look good, but may not leave room for individual expression. Image: Getty
Do you pay strata fees on a townhouse?
Most townhouses are part of a strata scheme, where you own your individual townhouse but share ownership of the common property with the other owners. Each owner pays strata fees to cover the costs of managing and maintaining these common areas, which might include driveways, gardens, barbecue areas or swimming pools.
The cost of these fees can vary according to factors such as the location, property size and the common amenities at the site.
When you purchase a strata title property, you will become a member of the owners’ corporation (previously known as the body corporate) which manages the strata scheme. This means you’ll have the right to vote on decisions about the operation of the owners’ corporation.
Consumer Affairs Victoria is an excellent resource for information on buying a strata title property, including a helpful checklist that covers finance, maintenance and repairs, management issues and more.
Not all townhouses are part of a strata scheme. In some cases, a townhouse might come under another title, such as a Torrens title, where you own the land and building. As Consumer Affairs Victoria explains, a legal practitioner or conveyancer should be able to advise you on how different titles will affect your ownership, rights and responsibilities.
How do you insure a townhouse?
If the townhouse comes under a strata scheme, Victorian law requires the owners’ corporation to have a minimum level of insurance cover for all buildings and common property. You can find details of this on the Consumer Affairs Victoria website.
A townhouse that has a title other than a strata title might require the owner to have a building insurance policy.
Owners of a townhouse can also take out contents insurance for their items, while renters insurance can provide contents cover suited to tenants. This helps provide peace of mind and protection in the case of an insured event like fire, flood, storm or theft. With RACV contents insurance, if an item is replaced after it is stolen or damaged, it will be replaced 'new for old' as standard.
What are the downsides to a townhouse?
Paying annual fees, levies and charges would be an obvious downside to owning a townhouse compared to a freestanding home if it comes under a strata scheme, as would the need to abide by owners’ corporation rules, which might restrict renovations to the property and govern other issues such as noise and installation of solar panels.
These rules could, however, be less stringent than in some apartment complexes, where the higher-density living and extra shared areas and amenities might bring tighter restrictions.
There’s less room for personalisation in a row of townhouses, which tend to look the same and might not have scope for exterior modifications.
Inside, a townhouse’s multi-storey layout will sometimes result in steep and narrow staircases, which may not be suitable for people who are older, have accessibility needs or are living with a disability. By their very nature, there’s also usually no escaping the fact that other people are living on the other side of the wall.
Depending on a range of factors, townhouses might also not appreciate in value as much as a freestanding house, making it less attractive as an investment.
The information provided is general advice only. Before making any decisions, please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s) issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.
