Do you know what to check when buying a townhouse?

What makes buying a townhouse different to a house?

Buying a townhouse means you are purchasing a property with shared walls and common areas managed through a strata company. Unlike a standalone house, you will pay quarterly strata fees that cover building insurance, maintenance of shared areas, and a contribution to the strata reserve fund. The lender will review both your ability to service the loan and the strata company's financial health before approving your home loan application.

In Subiaco, where older Art Deco blocks sit alongside newer developments near Rokeby Road and the western end of Hay Street, strata records vary considerably. A lender will usually ask for the most recent strata report, which includes meeting minutes, balance sheets, and details of any upcoming works or disputes. If the sinking fund is underfunded or major works are pending without a levy in place, some lenders will hesitate or decline the application outright.

What deposit do you need as a first home buyer in Subiaco?

You can purchase a townhouse with a 5% deposit using the Australian Government 5% Deposit Scheme. Housing Australia guarantees the difference between your deposit and 20% of the property value, which removes the need for Lenders Mortgage Insurance. There are no income caps and no annual place limits. The Perth property price cap under the scheme is currently $1,500,000, which covers almost all townhouse stock in Subiaco.

A buyer looking at a townhouse priced at the median in Subiaco would typically arrange pre-approval before making an offer. With a 5% deposit, you still need to demonstrate genuine savings and cover settlement costs, which include legal fees, bank fees, and adjustments for council rates or strata levies. Consider a buyer who has saved steadily through the First Home Super Saver Scheme and has a consistent employment record. That buyer could secure approval within a week if their strata report clears and the property valuation aligns with the contract price.

How do stamp duty concessions work in Western Australia?

Western Australia offers full stamp duty exemption for first home buyers purchasing properties up to $430,000, with a sliding concession that phases out at $530,000. From 21 March 2025, a broader concession applies to properties up to $700,000 in the Perth Metropolitan and Peel regions. Townhouses in Subiaco typically sit within this concession range, which means you may pay reduced transfer duty or none at all depending on the purchase price.

The First Home Owner Grant of $10,000 applies only to new homes valued under $750,000, so if you are buying an established townhouse, you will not receive the grant. However, stamp duty savings alone can reduce your upfront costs by tens of thousands of dollars. If you are buying off-the-plan, a separate rebate of 75% of transfer duty applies to apartments and townhouses under construction or newly completed, capped at $50,000. This rebate is available to a broader group of buyers, not just first home buyers.

What should you look for in a strata report?

The strata report tells you how the building is managed and funded. Open it at the financial statements first. Look at the balance of the sinking fund, which is the reserve held for major repairs and capital works. A healthy sinking fund should be proportional to the age and size of the complex. If the fund is low and a building report recommends roof replacement or facade work within the next few years, you need to know whether a special levy is planned or whether the owners have deferred the decision.

In our experience, buyers focus on the quarterly strata fee but overlook meeting minutes. Minutes reveal disputes, planned works, and whether the strata company is functional or divided. A complex near Subiaco Oval with 12 units and three years of unresolved disputes over parking may look fine on paper but present problems when it comes to lender approval or resale. Read at least the last four quarterly meetings and look for patterns rather than isolated incidents.

Can you use a guarantor to avoid Lenders Mortgage Insurance?

You can use a guarantor to increase your deposit to 20% or more without needing the Australian Government 5% Deposit Scheme. A guarantor, usually a parent, offers a portion of their own property as security so the lender treats your loan as though you have a larger deposit. This removes the need for Lenders Mortgage Insurance and can improve your borrowing capacity if your income is limited.

The guarantor is not giving you money. They are allowing the lender to register a second mortgage over part of their property, usually up to the amount needed to bridge the gap between your deposit and 20%. Once you have built enough equity through repayments or property value growth, you can refinance and release the guarantor from the loan. Most lenders will allow you to do this within two to five years depending on how quickly the property value increases and how much you pay down.

Should you fix or keep your interest rate variable?

A variable interest rate gives you access to an offset account, which reduces the interest you pay by offsetting your savings balance against the loan balance. If you maintain a healthy buffer in your offset account, you will pay less interest over time and retain full flexibility to make extra repayments without penalty. A fixed interest rate locks in your repayment amount for a set period, usually one to five years, but removes access to an offset account and limits extra repayments to a small annual threshold.

Many first home buyers in Subiaco are purchasing close to the western end of the suburb near Churchill Avenue or Roberts Road, where proximity to cafes and public transport adds to the lifestyle appeal but not always to rental yield if circumstances change. A variable loan with an offset account allows you to park income or savings and reduce interest while retaining liquidity. If you are uncertain about job security or future plans, that flexibility is worth more than rate certainty.

What happens after you get pre-approval?

Pre-approval gives you a conditional commitment from the lender based on your income, expenses, and credit history. It is valid for three to six months depending on the lender. Once you sign a contract to purchase, you submit the contract along with the strata report, a copy of the building insurance certificate, and any other documents the lender requests. The lender will order a valuation and review the strata records. If the valuation comes in at or above the contract price and the strata records are clear, the approval moves to final unconditional status.

In a scenario like this, timing matters. Subiaco townhouses in well-maintained complexes near the western precinct can attract multiple offers. If your finance clause is 21 days and you have pre-approval in place, you can move quickly. If you wait until after signing to start the application, you risk running past your finance clause and either losing the property or being forced to proceed without full approval in place.

What are the ongoing costs once you own the townhouse?

You will pay quarterly strata levies, which in Subiaco typically range depending on the age and size of the complex. Those levies cover building insurance, maintenance of common areas such as gardens and driveways, and contributions to the sinking fund. You are also responsible for council rates, water rates, and contents insurance for your own unit. If the strata company arranges additional works or faces an unexpected cost, you may be required to pay a special levy on top of your regular contributions.

Owning a townhouse in Subiaco means balancing lifestyle benefits with shared responsibility. You are part of a collective decision-making process, and major decisions such as renovations to common property or changes to by-laws require a vote at the annual general meeting. If you are considering a townhouse near the Subiaco Hotel precinct or along Bagot Road, check whether the complex allows short-term rentals if you think you might lease the property in future. Some strata companies have introduced restrictions in recent years, which can limit your options if your circumstances change.

Call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions