This snippet is from one of our previous episodes: The Difference Between the Art & Science of Investing.

“Would I be crazy to buy a freestanding home in a street full of units and townhouses?”

It’s a question many buyers are quietly asking right now… especially in suburbs undergoing rapid change.

If you’ve been out and about at inspections, you’ve probably noticed it too. Older homes being knocked down, townhouses popping up, and entire streets starting to shift in character.

So what does that mean if you’re planning to buy and live there?

In this throwback episode, Bryce & Ben answer this question from a first home buyer eyeing Laverton, and explore why the answer isn’t a simple yes or no.

Thinking About Buying in a Changing Area?

If you’re buying to live in the property, lifestyle matters just as much as performance.

It’s not just about capital growth. It’s about how the street feels, who your neighbours are, and whether the property supports the life you’re trying to build.

If you’d like a second opinion before making your move, you can chat with a Buyer’s Agent from Empower Wealth’s specialised Home Buyers division. They can help you assess the area, understand the trade-offs, and make a confident decision that aligns with your goals.

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If You Enjoyed TPC Gold | Buying as an Owner-Occupier in a Changing Suburb, You Might Also Like:

Transcript

Bryce: The next question is from Frez. Let’s have a listen to that now.

Frez: Hi, Bryce and Ben. My name is Frez. I’m asking this question from Melbourne, and I’m hopefully a soon-to-be first home buyer. My question was: would I be crazy to purchase a home as an owner-occupier — a home that I’m going to be living in — when the addresses to the left and right of me are filled with two or three units?

The address in front of me is a compound with four townhouses, and it’s pretty much the same story up and down the street, or up and down any street within that suburb. The suburb I’m talking about is Laverton, in the western suburbs of Melbourne. Laverton North was traditionally an industrial area, but recently with Williams Landing, Truganina, and Tarneit further down the road — all these house and land packages — it seems Laverton has become all the more appealing, purely because it has established homes, much bigger blocks, and actual public transportation, which these other areas lack: two train stations, closer freeway access, and a bus network.

But driving through a few weeks ago, prior to the restrictions, I noticed everybody was tearing down houses, and the amount of construction — unit after unit, townhouse after townhouse — was striking. Should I avoid buying in this area as an owner-occupier?

I just wanted to know your thoughts. Thank you for the podcast and all the content. You guys have been an absolute godsend since I discovered you, given the stage I’m at right now. Thanks for everything.

Bryce: Laverton, Ben — just for those not familiar — is about 20km west of Melbourne. As Frez mentioned, there is a train line running through it and it is established. So, would you buy there as a first home buyer with units up and down the street?

Ben: Yeah, I know the area fairly well, Bryce. Coming off the freeway, there’s a lot of change going on in there. There will be a lot of infill and backfill of land, and potentially a ripple effect and gentrification coming through. Frez is right to be concerned — you don’t want to be caught in a market where there are no house-proud people.

You can sometimes drive through even some of the better suburbs — Footscray, for example — and find rows and rows of apartments with never enough street parking, bins permanently out the front, no sense of pride or care. That creates an unappealing environment, at least for now. Over time that may change as gentrification comes through, but it’s a natural gut feeling to question whether you’d be comfortable owning a home in that area. When there’s a bit more house-pride on a street, that’s your first impression as a buyer — it’s why we shy away from busy roads, noise pollution, and high-density saturation.

The reality is, if you’ve got the only freestanding house and everyone else has an apartment, your land is probably going to be more prized over time — especially if a developer wants to take it off your hands down the track. There is an X-factor to potentially owning that block of dirt. The best illustration of that is the classic picture of a single freestanding house sitting in the middle of a CBD, surrounded by towers. What is that land worth?

That said, as a conservative adviser, I’d still be looking carefully. Laverton closer to the train station is fine, but I’d be cautious about getting into a location that is predominantly rental stock. I don’t love that in up-and-coming areas. In more established, higher land-value areas — South Yarra, Elwood, Caulfield — a 50–60% density blend is okay. The same applies to Bondi in Sydney, or New Farm and Fortitude Valley in Brisbane.

So come back to first-principles thinking: look at supply and demand, and think about why you’re buying. I love the idea of getting onto the property ladder, but be particular about your selection. You need to be comfortable living there, and if it’s a stepping-stone property that you plan to hold and build from, that’s what you need to factor in.

Bryce: Good points. I want to remind Frez that within any suburb, you’re not buying Laverton — you’re buying a particular house on a particular street. There are A streets, B streets, and C streets. The question is: where does your street sit in that hierarchy within Laverton?

And Ben made a really good point: if those units are being bought by owner-occupiers rather than investors, those people are still house-proud, even if they’re not in a freestanding home. So it’s important to work out what proportion of a street is tenanted versus owner-occupied.

In a big city like Melbourne, congestion is a massive issue, and you mentioned Williams Landing and the subdivisions further west. People will still place real value on being closer to the city. As a buyer’s agent, when I drive down a street and there’s too much medium density, I’m less likely to want to buy there — but that could shift just two or three streets away.

You asked whether to buy as an owner-occupier. Well, that depends on the lifestyle factors you’re chasing. We might assume your question is about growth, but buying your own home is often about much more than that — it’s about being near friends and community, the self-esteem of having your own castle, having a patch of dirt. There’s a lot that comes with being an owner-occupier that we wouldn’t consider if we were answering purely as investors.

So: be mindful of A, B, and C streets. Be wary of streets full of rental stock. I’m okay with a street full of townhouses if there’s that sense of pride Ben described. And just be aware that townhouses and medium-density stock do grow — they just historically don’t grow as much as freestanding houses, because of the value placed on land, freedom, and privacy.

Sometimes we build a plan where a client only needs 5–6% growth rather than 7–9%. If the property serves a purpose from a lifestyle perspective and delivers modest growth, that can be fine. But having back-tested hundreds and hundreds of properties, we generally don’t see that type of stock outperform. Capital growth tends to be modest if you buy the right ones.

That said, as a first home buyer, price point may be the deciding factor. You might not have enough to consider the alternative. It might simply be a stepping stone to your dream home — and there’s nothing wrong with that. Hopefully there are a few wisdom bombs in there from Ben, and a few points from me, that help you work out whether this is a viable option for you.

Ben: Nice one, Bryce.

*Transcript has been edited for clarity and readability.