Potential homebuyers in search of affordably priced options with room to grow may want to consider looking at townhouses in suburban regions outside of major cities where choices continue to be more affordable.
In fact, townhomes have recorded "robust" sales in several Canadian housing markets this year, as buyers sought after affordable ground-orienting housing and took advantage of low-interest rates amid the pandemic.
A new report from real estate data firm Altus Group shows that new townhome sales in two of Canada's largest markets were strong in 2020, with Vancouver seeing townhouse volumes double last year's levels, with strong sales occurring at affordably priced townhouse developments in Surrey, Langley, and Coquitlam.
Locally, the Greater Toronto Area (GTA) has seen a sharp increase in demand for all single‐family built‐forms, but townhouse activity has seen the biggest improvement over 2019. Outside the GTA in the broader Greater Golden Horseshoe, townhouse volumes are the highest recorded since Altus began tracking in 2014.
Even in Alberta’s weak residential real estate markets, townhome sales were still only down slightly in Calgary and Edmonton, the report said.
According to Altus Group, demand for townhouses continues to be the strongest in the suburban regions of the major metropolitan areas where prices for townhouse units are often lower than 2‐bedroom condo apartments in more central areas.
However, despite the strong demand, the supply of townhouse land still remains scarce in larger real estate markets. As a key component of the “missing middle”, townhouse land is often prohibitively expensive in urban areas.
“With housing affordability challenges in the major markets increasingly pricing single-detached housing out of the reach of many buyers, townhouses provide a family-sized option with many of the desirable features, such as garages, private front door and amenity spaces, at a much lower price point,” Altus Group said in the report.
Altus described new townhouse buyers as a "diverse group," and said that the built form option is now becoming increasingly popular with younger consumers with or without children.
Looking ahead, given the single‐family price affordability challenges in major housing markets coupled with economic uncertainty from the pandemic, Altus expects that the demand for affordable townhouses will continue to grow in Canada.
The report suggests that the demand could be potentially accelerated by pandemic-driven factors such as shifting buyer behaviours, low-interest rates, and flexible remote work arrangements that allow employees to live a further distance from the office.