What’s in demand in a downturn
The 5 things unit and townhouse buyers want are coming from what they cannot currently borrow. This month the interest rates have increased again and now lending capacity has dropped 20%. This reduction is leaving fewer options for buyers.
This readjustment appears to have prompted some buyers to consider looking at larger units and townhouses. Entry-level houses are always scarce and in demand so the price of those properties is not as affected during downturns. We are now seeing a trickle effect. Buyers that could afford 20% more in May 2022 are now looking at the entry range and the entry range is adjusting to bigger units and townhouses.
What do these buyers need/want?
Many young families are happier to be close to amenities and work so units and townhouses are being considered where the house was the first preference. Houses are generally bigger, have a yard, often single story, have secure car access and are located where people like to live. Well, unit/townhouse developers have always tried to replicate the benefits houses offer and many people are choosing this class of property. As agents we do notice the must-haves that buyers are seeking and the top 5 are:
- A garden or courtyard
Parents of small children or those that have a pet are very keen on green space. A place for children and pets to explore, a haven to unwind after work or on weekends and entertaining spaces are top of the must-haves if they cannot buy a house.
- Third bedrooms
Space is what house buyers want and the third bedroom in a unit or townhouse helps buyers adjust to strata living. Having an office space or extra accommodation for guests is a priority. Covid got us working from home so many buyers like that get away from distraction space.
- Large single-level units
There are many buyers downsizing and they don’t want stairs. Ground floor garden units are in demand because many buyers require no finance. In a slow market, there are people that are not affected by the interest rates.
The humble garage is always in demand. Storage is always important and protecting our second largest investment – our car – is high on the want list. Not having to struggle for on-road parking or lugging groceries for long distances in the rain is important for many buyers.
Old is new again – seems everyone wants to walk to shops and transport. For decades we relied on cars and were unperturbed by driving everywhere. That seems to be changing. Given the cost of fuel and our preference for convenience, walkability is king.
For first home buyers, units and townhouses are a great first step. Units and townhouses have a supply and demand impact too and whilst the media is claiming units are more impacted than houses that is not completely accurate. Those with all or some of these characteristics make them more sellable. For sellers, it is valuable to know that enhancing what is in demand makes your listing more attractive in a slow market.