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Going to town: Growing popularity of townhomes has builders struggling to keep pace with demand

Townhomes have grown up, so to speak. Once considered a stepping stone to single-family home ownership, today’s towns are more popular than ever and are often the goal rather than the starting point.

There are many reasons for this trend, from affordability to availability to lifestyle choices, and it means builders are now having trouble keeping up with demand.

“Townhomes are flying off the shelf; builders can’t release them fast enough,” noted Cheryl Rice, Ottawa president of industry analyst PMA Brethour Realty Group, in a market wrap-up in the spring.

Singles and townhomes typically jockey for top spot in the monthly new-home market share, but Rice reported that in 2017 overall “towns reigned king,” capturing 45 per cent of the market versus 39 per cent for singles.

That trend carried through the first four months of 2018, with towns not ceding that top spot until May, when a declining inventory dropped them to a 40-per-cent share (vs. 43 per cent for singles).

Their growing popularity prompted eQ Homes, which is known more for its adult-lifestyle bungalow options, to introduce a line of two-storey townhomes last year. The first models to showcase those towns opened at Fernbank Crossing in June.

Wanting to appeal to a wider range of buyers, the introduction of the towns was “an opportunity for us to expand on what we were seeing in the marketplace that was going very successfully for other builders,” says eQ sales manager Harley Wallin.

The strong demand has led to at least a dozen new home projects either temporarily or permanently running out of townhomes to sell. In one example, Phoenix Homes launched last fall with towns and singles at Pathways in the Findlay Creek area only to sell out of its towns almost immediately, including the ones that had been set aside for model homes.

Many builders will have more towns in future phases, but are not yet ready to release them.

So, why are we seeing this now?

For that, we need to go back to the beginning of the decade. Derek Nzeribe of the real estate firm Milborne Group sees the trend stemming from the introduction around 2010 of contemporary custom infill towns that brought a new look to Ottawa homes. Designs that emphasized natural light, a good flow in the spaces and open concepts, plus unexpected features like rooftop terraces and new looks for exteriors initiated the change.

“You saw a lot of those elements in the custom home realm start to translate into the more production-style builders,” he says, beginning with new window treatments and exterior cladding that took a modern bent.

The launch of projects like eQ’s Greystone in 2015, which is redeveloping the former Oblate lands along the Rideau River in Old Ottawa East, accelerated the shift, offering a completely different three-storey urban townhome style but in a production build, says Nzeribe. Other builders also began offering contemporary designs, including Urbandale’s Horizon series and HN’s towns designed by veteran contemporary architect Christopher Simmonds.

“In the last year, I’ve seen that become more of the norm,” says Nzeribe. “People are looking for those townhomes that have the modern style to them, that very funky look” that still offers a lot in terms of design.