The Townhouse Enigma
Why people don't choose townhouses continues to baffle me despite understanding why
A few years ago I wrote the following on our blog about townhouses.
“Let’s not make any bones about it but townhouses are an enigma. Here at Valencia Property we love them. They offer loads of space, great locations, plenty of potential and community (Being in a town and surrounded by others) and they are usually great value when you look at the price per square metre. However, they often require a lot of modernisation, and the bigger they are the more that modernisation will cost, they need more upkeep than an apartment and they usually don’t have the kerb appeal as what lies behind that townhouse door is often very well disguised. We don’t sell many of them.
We had written about townhouses before on the blog and how you get all or nothing, either totally reformed or needing everything doing to it and the costs associated with that.
Why I Chose A Townhouse
I have told this story to many a client over the years. I wanted a garden and I wanted a pool back in the day when I was buying. But... and it’s a big but, I am not a gardener and I’m not a pool cleaner. There is a possibility that I could learn to keep a pool blue and a garden green, but a green pool (Like Trump’s) and a dead, browned off garden are much more likely, so I got the above instead.
I wanted to concentrate more on living and working in Valencia rather than desperately trying to save plants from my incompetence. And I wanted someone who was an expert to do the heavy lifting for me in terms of gardening and pool maintenance (Without having to pay them just myself). Therefore I chose a town house with a shared pool and garden. The costs of the gardener and pool maintenance are shared between all of the owners and I get to use a sparkling clean pool in my lovely garden at least twice a year (Laziness and work pressures) I could, if I was so inclined, use the pool every day all year round, I could take in days sitting under the trees reading a book and maybe some day I’ll get back to that, unlikely but everything is possible right?
You, on the other hand, might decide to choose a townhouse that doesn’t have communal facilities, a townhouse which is all yours. I get that. Many people don’t want a shared pool, they want their own oasis where they can make as much noise and spend as much time as they want without having quiet time during siesta or in the middle of the night, a place to skinnydip and cool down. Many people don’t want a pool and garden but outside space in the form of a patio with plants and a bit of greenery may be enough. After all we have a big swimming pool on our doorstep known as the Med and most towns have superb sports facilities including a huge swimming pool at the local sports centre.”
Three Years Later…
As stated I wrote this on the blog a few years ago. Things haven’t changed. Townhouses continue to be undervalued by buyers and cheaper per square metre than other types of properties (Villas and Apartments) So today i want to suggest some reasons why that might be.
Renovations
Townhouses in Spain tend to be disproportionately older stock. Many were built before modern building regulations tightened, meaning electrics, plumbing, and insulation are frequently substandard. The renovation cost scales because of the floor area and townhouses are typically larger than apartments, so the bill tends to be larger too. Buyers may see a villa renovation as an exciting blank canvas but the same scope on a townhouse can feel like a money pit. The psychology differs even when the numbers are similar because the look of the townhouse may remain exactly the same. We sold one in Alboraya last year that was truly ugly from outside but wonderful within. The buyer appreciated the hidden beauty and the huge amount of space.
Kerb Appeal
Spanish townhouses frequently present a blank, heavy facade to the street. This might not be true in the Cabanyal for example where colourful tiled facades are more common but unpainted walls with small windows typical of townhouses often dominate. There are no views to photograph as they tend to be in smaller streets off the main drag, no sweeping driveway up to a large balconied villa facade, no pool visible from the listing photos. The emotional connection that often presells a property online is totally absent. In a world where buyers scroll Idealista on a phone in five seconds, a townhouse loses before anyone reads the description, looks into the advantages or thinks about the practicalities. Images sell.
Location
Townhouses may sit in an awkward middle ground. They are not in a resort complex, unlike many coastal apartments, because they were built before resorts were a thing. Buyers potentially wanting a managed holiday-home environment don’t consider them. They are not standalone countryside or coastal properties either, so buyers wanting isolation and space or views don’t consider them either. They serve buyers who actually want to live in a Spanish town, which might well be a narrower audience than either of the above groups. Cullera is a great example of this. We sell plenty of apartments overlooking the bay in the “tower blocks” but we sell very few townhouses in the old part of town that don’t directly have a sea view.
Running Costs
A villa has known costs which you can appreciate and see where your money is going: a garden, a pool, a cleaner. An apartment has a community fee, which is visible and quantifiable upfront. A townhouse can sit in an ambiguous middle zone where buyers are uncertain what they will be paying and to whom. Is there a community cost? How much is it? What does it pay for? Uncertainty kills decisions in the end and as each townhouse is different in the minds of a buyer it can cause them to be discounted. The truth is most townhouses enjoy the fact that there are no common costs. No community to which you may be beholden. However people don’t see this.
Resale Worries
A little known psychological fact* is that buyers are thinking about the potential of selling even when buying and even if they think the property they are buying is their “forever home”. This was brought home to me yesterday when talking with a client about a place we had just been to see (I was covering for a double booking, I don’t do many sales visits these days) The question I was asked outside was if the cost of the necessary reforms would make the property “worth more” in the future. That “worth more” is a tell (Poker term there) that shows the client is already thinking of the resale. That instinct is universal and the problem for townhouses is that the resale answer may well be less reassuring than it would be for an apartment or villa. Funny thing though is the clients from yesterday were talking about an apartment.
This same truth that townhouses are less in demand now can make buyers nervous about selling on later when they imagine a scenario that they may have to sell quickly. It is self-reinforcing. Apartments and villas have greater proven resale markets even if they are not “worth more”. Townhouses are perceived as a harder exit when it comes to move on. This might be anecdotal and maybe a Valencia Property market thing, it might be totally different elsewhere, so I wouldn’t state this as fact, but it seems to me to be a real factor in buyer psychology here.
(*This might well have been made up by me right here right now)
Concluding Thoughts.
I started by saying that townhouses are undervalued, I still think it’s true. However, I could be wrong, I always reserve the right to be wrong.
Townhouses might well be valued correctly. It may be that the lower price per square metre accurately reflects lower demand from a smaller buyer pool, a higher renovation liability and poorer liquidity in the resale market. The market may well be pricing them correctly, not undervaluing them.
You never know, it may be just that I like them because I live in one and everyone we have ever sold to who has bought one loves theirs. As I said I could be wrong but my instinct is often very right.