Townhomes attract first-home buyers under Home Guarantee Scheme

Townhomes are emerging as a housing type of interest for first-home buyers entering the market under the expanded Home Guarantee Scheme (HGS), according to realestate.com.au.

Larger than apartments but more affordable and lower-maintenance than detached houses, townhomes often offer three bedrooms and outdoor space — a strong fit for buyers planning for families.

With Westpac data showing the average first-home buyer is now aged 34, advisers say it’s easy to see the appeal.

“For some first-home buyers, particularly those that are a bit older – and first-home buyers have been getting older over the last two to three decades – having the extra bedroom and extra space that a townhouse provides relative to an apartment may be attractive,” said Angus Moore (pictured), PropTrack’s executive manager of economics.

Incentives and policy tailwinds

State stamp duty concessions on new builds are expected to drive additional demand, particularly for off-the-plan projects.

The federal government’s expansion of the HGS has also opened the door wider: income caps have been scrapped, property price thresholds lifted, and eligible borrowers can now buy with as little as a 5% deposit.

Housing Minister Clare O’Neil said the changes would give people “help right now,” though critics argue demand-side measures risk lifting prices without addressing supply.

Supply constraints bite

The catch is limited availability. According to the Australian Bureau of Statistics, townhouse approvals dropped 19.1% month-on-month in August to 2,424 dwellings, compared to a 12-month average of 2,632.

Developments within price caps

While not all townhomes fall under scheme thresholds, a number of projects across major cities remain eligible:

• Sydney: Frasers’ Ed.Square in Edmondson Park, with one- to three-bedroom homes under the $1.2m cap.
• Melbourne: Stockland’s Haven at Altona North offers two- to four-bedroom options, with larger homes from $939,000.
• Brisbane: Alba at Albany Creek features three-bedroom homes under the $1m cap, plus shared amenities like a pool and landscaped grounds.
• Adelaide: West Lakes’ 17ha redevelopment has two- to four-bedroom homes, with entry prices from $759,000 — below the $900,000 cap.

Broker takeaway

For advisers, the growth in townhome demand underlines three key points:

• Understand which projects fall within HGS price caps and incentives.
• Guide older first-home buyers toward properties that balance space and affordability.
• Prepare clients for constrained supply if approvals remain weak.

Melbourne broker Adele Andrews said, “The scheme is opening doors. There’s more confidence in the market; probably a little bit more FOMO now that doors have opened.” But she cautioned that without more new housing, affordability pressures could rise further.

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