A faster approval pathway for townhouses in one state has shown how popular this type of home can be – under the right circumstances.
Victoria’s Townhouse Code, which came into effect in March 2025, has created a fast‑tracked planning pathway for townhouses, duplexes and low‑rise apartments of up to three storeys, and set of a surge of applications to build across the state.
According to the state government, applications for townhouses have boomed by nearly 50% since the change, rising from about 4800 the previous year to 7000 since March 2025.
M3 Group's 64 Thackeray Road is five-townhome project in Reservoir. Picture: realestate.com.au
The Townhouse Code, part of the state government’s push to make Victoria the “townhouse capital”, outlines clear standards around setbacks, tree coverage, bedroom sizes and access to sunlight, ensuring new homes fit within their neighbourhoods while maintaining liveability.
If a project meets those standards, it can move through the planning system more quickly, allowing homes to be built sooner.
The state government says Melbourne local government areas recording the highest number of townhouse applications include:
- Monash: 515 homes, a 51% increase
- Merri-bek: 452 homes, a 39% increase
- Banyule: 402 homes, a 98% increase
- Darebin: 345 homes, a 63% increase
Across Melbourne’s middle suburbs, applications jumped from around 2000 to more than 3100 in a year.
Regional Victoria has also seen strong growth. Greater Geelong recorded 664 homes, an 83% increase, while Greater Bendigo recorded 166 homes, a 207% increase.
The Fields features two-, three- and four-bedroom townhouses set along landscaped laneways. Picture: realestate.com.au
Victorian minister for planning Sonya Kilkenny said the rise in applications showed the reforms were having an impact.
“Thousands more townhouse applications in a year shows our reforms are working,” she said.
“These reforms are about giving young Victorians and families more housing choice in the communities they love.”
On the ground
Across Victoria, developers are increasingly leaning into medium-density projects that sit more comfortably within established neighbourhoods.
In Reservoir, 64 Thackeray Road by M3 Group is a five-townhome project that gives each residence its own street frontage and no owners corporation.
The homes’ setbacks, private courtyards and architectural detailing allow the development to increase housing supply while still reading as part of the existing streetscape — one of the central goals of the reform.
In Essendon, Strategic Group’s Wini & Fred reflects a growing emphasis on internal amenity and liveability.
Spread across multiple levels, the 11 townhouses use north-facing glazing, clear zoning between living and private areas, and proximity to surrounding parkland to deliver a low-rise alternative to apartment living.
Further north in Bellfield, The Fields by Glenvill Developments blends two, three and four-bedroom townhouses into landscaped laneways framed by mature trees.
With gas-free homes, solar power and thermally efficient design, the project also reflects a growing focus on sustainability in medium-density housing.
Homes at 1 Francesco Street feature expansive, private courtyards. Picture: realestate.com.au
In Bentleigh East, 1 Francesco Street by KMBV comprises seven luxury townhouses with generous internal layouts, private outdoor spaces and secure garages.
Select homes also include dedicated home office spaces, appealing to buyers seeking flexibility within an established suburban setting.
At the premium end of the market, Orchard Mews by MontCoeur in Glen Iris is an all-electric development featuring double-height living spaces, private open areas and extensive landscaping within a leafy suburban street.
The homes also include customisable multipurpose rooms with natural light, reinforcing the shift towards townhouses as a deliberate lifestyle choice rather than a compromise.
Are you interested in learning more about townhouse living? Check out our dedicated New Homes section.
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