Why now is the time to invest in Melbourne’s booming townhouse market

As 2025 unfolds amid global economic uncertainty, especially due to the potential impact of President Trump’s tariff plans, savvy investors are turning to stable, long-term real estate options. One standout is Melbourne – Australia’s largest and fastest-growing city – where townhouses in outer suburbs offer compelling investment value, especially when purchased directly from developers.

Melbourne’s Market Recovery is Gaining Momentum
Despite macroeconomic headwinds, Melbourne’s residential housing market has started to rebound strongly. Demand has strengthened since Q1 2025, driven by forecasted interest rate cuts and record immigration levels – most of whom stay in Melbourne, unlike Sydney, where many relocate after an initial period due to higher living costs. Most recently, market commentators have also suggested many owner occupiers in Queensland and NSW’s largest cities are looking towards moving to Melbourne as their home cities become unaffordable.

Melbourne offers the best affordability among Australia’s major cities and is well-positioned to lead the housing recovery. For owner occupiers and investors – Melbourne townhouses present a more affordable and promising alternative offering a sweet spot between costs (both initial & ongoing), liveability, and rental appeal.

Townhouses: Meeting the Market’s Needs
Townhouses are emerging as the ideal solution to Australia’s housing shortfall. While Victoria needs 70,000 new homes annually through 2029, just 60,220 were delivered in 2024. Townhouses made up only a third of this – signalling major growth potential.

Often called the “missing middle,” townhouses strike a balance between apartments and detached homes. They’re highly attractive to investors, young families, downsizers, and tenants for their affordability, low maintenance, and house-like features such as private entries, private backyards, and direct access garages. Australians, both owner-occupiers and tenants, have a strong preference for houses or house-like features over apartments.

For investors, they offer cost advantages too: lower land tax assessments, limited-time stamp duty concessions on strata titles, and better rental returns. In Melbourne’s growth corridors and in-fill locations, 3-bedroom, 2-bath, 2-car townhouses led March 2025 sales – offering high-demand housing at competitive prices.

Why Growth Corridors Make Sense
Local Government Areas like Casey (southeast), Wyndham and Melton (west), and Hume and Whittlesea (north) account for the majority of townhouse sales. Supported by infrastructure, good schools, shopping centres, and public transport, these areas blend affordability with liveability – key drivers for both local and overseas buyers. It is also worth noting that infill suburbs closer to the Melbourne CBD (or one of the several Victorian Key Activity centres) usually attract a price premium, plus the North and West are usually considered better value than the South-East areas. Government investment in planning and transport continues to boost long-term value in these corridors, reinforcing their appeal.

What Buyers and Tenants Want
According to Oliver Hume’s 2024 survey, homebuyers and renters prioritise:
• Property Features (31%) – size, layout/design, and affordability
• Location & Accessibility (24%) – proximity to work, transport, and family
• Amenities & Lifestyle (16%) – development/estate facilities, parks, schools/tertiary, cafes, and shopping
• Community & Living (15%) – sense of neighbourhood and social connectivity
• Development & Investment Potential (14%) – future capital growth and quality of the developer

Townhouses in Melbourne’s growth corridors and in-fill areas tick all these boxes, especially 3-bedroom layouts, which are most in-demand due to their versatility and rental appeal. Investors can also benefit from strong tenant demand among small families, professionals, and downsizers seeking modern, low-maintenance living with space and privacy.

Why Buying Direct From Developers Makes Sense
For buyers, purchasing directly from a trusted developer like Resimax Group offers several advantages:
• Developer Incentives – Discounts, upgrades, and other special offers that are not available on the resale market. Plus, unlike Real Estate Agents or Project Marketers, Developers only get paid at the end so are keen to assist you through the whole journey.
• Stamp Duty Savings – Buying off-the-plan can result in significant stamp duty concessions whilst the Vic government provides this new concession for strata title properties.
• Higher Capital Growth – New builds align with modern demand and provide full depreciation benefits
• Transparency – Direct dealings with the builder/developer ensure clearer timelines and better support
• Tenant Appeal – New townhouses are purpose-built for rental demand

For Owner-occupiers and Investors, buying an existing property can be highly competitive especially at an auction, whereas a developer-direct model offers a smoother and more transparent experience.

Why 2025 Is the Window to Act
With more interest rate cuts expected, borrowing will become cheaper and fuel price growth. Townhouse supply remains tight, and new apartment prices are set to rise further due to the new Developer Bond for 4+ storey development requirements in Victoria – making townhouses even more attractive by comparison.

Victorian land supply is also shrinking – annual greenfield lot approvals dropped from 28,230 in 2018 to just 11,570, with only 7,000 per year expected by 2030. This supply crunch, combined with strong population growth, sets the stage for capital growth and rising rents.

Buyers who act now can secure prime townhouse assets before the next growth cycle gains full momentum in Melbourne – which experts agree is already considered undervalued compared to other major Australian cities.

How to Get Started
1. Choose a Trusted Developer – Resimax Group’s and its own in-house builder, Tick Homes, have over 50+ years of experience delivering quality homes.
2. Pick the Right Development – Focus on amenity-rich developments in suburbs with strong infrastructure, transport, education, lifestyle and shopping.
3. Opt for Smart Designs – 3-bed, 2-bath, 2-car layouts are the townhouse sweet spot and offer excellent resale and rental appeal.
4. Engage Local Experts – Use local conveyancers and accountants familiar with property buying. Resimax Group has an in-house Settlements team to hold the buyers’ hand through the whole process.
5. Use a Property Manager – Resimax Group’s partner, Leap Real Estate, looks after the rental cashflow guarantees and full-service management for Investors.

Final Thoughts: A Rare Opportunity
Melbourne’s townhouse market is uniquely positioned for growth. For Buyers, the timing is even more favourable given the Victorian government’s limited time Stamp Duty exemptions for Strata titled property. Resimax Group offers direct developer access, turn-key products, new building warranty, and tax-saving advantages in Melbourne’s most promising locations.

With fundamentals aligned and supply tight, new Eynesbury townhouses offer buyers a timely pathway to long-term profit.

To find out more on how Resimax Group is bringing it all together to offer high-quality Townhouses close to amenities and making the process easy for buyers click here to find out more.

Disclaimer: This article is for general information purposes only and should not be taken as advice. Always seek professional advice from suitably qualified professionals familiar with your situation and goals.

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Steven Molnar is Head of Research and Education for Resimax Group. With over 25+ years in property and finance in Australia and internationally, he brings a unique perspective to his blogs with interesting property insights.