Things to Consider When Building a Townhouse


Jump to: Introduction | Your options for your townhouse development | What are your financial objectives with your townhouse? | Conclusion

As times change so does what we want and need from our properties. Deciding on the appropriate steps to take and making the right decisions is challenging and needs solid information and careful thought. After all, for most of us, our property is our greatest asset, and even more so if our property has development potential. The key to finding the solution that meets both our immediate and our future objectives involves many considerations.

Does it serve your needs?

In some cases, our current home may no longer serve our needs – it may be too large, too small, or has become outdated and inefficient. Over time our lifestyle needs and preferences also change and the maintenance and upkeep of our existing home can become unwelcome.

But for most of us, moving away from the local area we love and the social networks we have formed is a real issue. Having an intimate understanding of the streets where we live and all that the location has to offer provides us with a great feeling of comfort and security. This can become a significant concern when thinking about relocating.

Very often, the search for the right home that meets all of our requirements turns out to be impossible to achieve. What a lot of people don’t realise is that this can often be solved by taking advantage of the full potential of their existing property! A good knowledge of the site, together with a clear understanding of your needs is all you need to ensure that a townhouse design can be developed that makes the most of your property and most importantly is tailored to your specific needs and priorities.

Townhouse development costs

Of course, financial peace of mind is also a critical factor. Funding your change in lifestyle to ensure you have a financially comfortable retirement or that you do not have to take on excessive debt is a key consideration. So it is certainly worth exploring all the options to ensure you financially capitalise on the value of your greatest asset. 

Whatever your situation and level of experience, most people find the decision process quite overwhelming and just don’t know where to start. There are so many options – do you look at developing your existing property? Do you sell and relocate? Or do you perhaps buy a different parcel of land with development potential. What happens if….? There’s a lot to know about townhouse development and advice that properly covers all the pros and cons and covers all the different options can be difficult to find.

Lowe Design & Build are here to help explain all the key steps in assisting you to in making an informed decision, one that works best for your situation and that you feel good about. Utilising both our own experience and accessing advice from our professional partners, we are here to ensure you have a successful townhouse development outcome.

If you are property owner thinking of developing, we assist in providing all the relevant information in close consultation with you. Site assessment, feasibilities, design discussions and display visits all help in developing your ideal ‘client brief’. This sets the course for our team and provides clear objectives for your townhouse development.

If you are considering purchasing a property for development, due diligence prior to committing to a new purchase is imperative to ensure the property you are buying has the right development potential. Our team can help you assess the viability of a development site at even the earliest of stages. Having a sound understanding of council requirements, the potential number of dwellings, easements, overlays, possible pre-designs, size considerations, costs, real estate valuations and feasibility reports provides great peace of mind prior to your potential purchase and can avoid expensive mistakes.

Your options for your townhouse development

There are many reasons why developing your existing property just may not be viable. When this is the case, buying or partnering in a new townhouse development is an excellent option. It means you can select the most suitable townhouse from Lowe’s list of current and planned landowners’ projects without all of the constraints you may have encountered with the planning of your own development. In most cases, you can access properties which are in blue chip, tightly held locations and have plans and permits already in place. Most purchasers simply access the existing equity in their current homes and use those funds to finance their new townhouse purchase.

Pre Construction Townhouse Sale Option

When choosing to partner in a new townhouse project, you can purchase via a ‘Pre Construction’ townhouse sale. This purchase can happen in two different ways –

  1. Either a 10% deposit is paid by the Buyer prior to the construction starting and the balance of the funds is paid at the completion of the build, or
  2. A Land and Build contract is effected where the Buyer settles on the subdivided land at the beginning and funds the construction throughout the build.

When purchasing with the first method, (10% deposit + balance at completion), the existing Landowner often needs a Buyer for the townhouse they plan to sell before beginning any construction works. This is because under this arrangement, it is the Landowner’s responsibility to finance the construction of both townhouses throughout the whole build, this pre-sale provides assurance to the lending institution and secures the development costs against the buyer’s commitment set to be finalised once construction has been completed.

If you are the Buyer, it means you pay just your deposit to secure the property and don’t pay any more until the project is complete, so you have more time to save for a larger deposit during the construction period, which reduces the loan repayments.

When this method is used, the Buyer can have some input in the design of the project, but most of the bigger decisions are made by the existing Landowner.

Land and Build Contract Option

In method 2, the Land and Build contract scenario, the Landowner still needs to find a buyer before beginning any construction works. This method is more common in the event the Landowner has difficulty trying to access funding to undertake a full build contract.

By selling a part of their land to a Buyer they can then access that money to focus on funding only their half of the development. For the Buyer, it means paying for their part of the subdivided land prior to construction starting. They will then pay progress payments, as per the terms set out in their build contract, throughout the construction of their townhouse.

Under this arrangement the Buyer has more autonomy and flexibility with respect to the internal layout of their townhouse, although they still need to work within what has been proposed by the original landowner and approved by the relevant authorities.

Straight to Site Option

The final method is the ‘Straight to Site’ method. In this case the Landowner commits to fund the entire build themselves. This means the Landowner retains full control of the project throughout the planning, permitting and construction phases. This eliminates the need to wait for a Buyer but also leaves open the opportunity for the Landowner to select the best option for their financial situation. For example, they may choose to sell whilst construction is underway, sell at completion or retain the property as a long-term investment.

For the Buyer, it means you can move straight into a completed property where most of the decisions have already been made. This is ideal for those who only want to make one move and who like to physically see some or all the home completed. Also, having a fixed completion date in place helps them get their finances in order, to meet the required timeframe.

Knowing about and having access to these different options makes it possible for many more people to develop their property’s potential or to secure themselves a home they love in an area they prefer.

What are your financial objectives with your townhouse?

Achieving your financial objectives and aligning them with your desired lifestyle is always a key objective for your townhouse development. How to do that nearly always depends on your stage of life.

Townhouses for Investors

Regardless of whether it is a first-time developer or a seasoned professional, investors are always focused on achieving a good return on their investment, and this will be the primary motivator for entering into a townhouse development. For some this may involve achieving a return through the sale of the townhouses. For others it may be a longer-term strategy through holding and leasing the property out as an income stream.

See our range of townhouses for sale here.


Wherever you may be on your property journey, having a thorough understanding of your financial and lifestyle objectives means the design and cost management can be personalised to your needs and result in the achievement of your desired development outcome. If you’d like to learn more about townhouses, our team is ready to help. You can give us a call at 03 9587 8400 or contact us here for more information.

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Please Note | The information provided is general in nature and your personal financial situation is unique. Any information and advice obtained through this article may not be appropriate for your situation. We would recommend seeking financial advice before proceeding.