Melbourne builder Nostra Homes has released five single storey townhome designs for compact lots, and the approvals data suggests it is not the only one seeing demand. The harder question is what it takes to make one level work on a narrow block.
Melbourne builder Nostra Homes has taken the stairs out of its townhouse range. The company has released five single storey townhome designs built for compact lots, a format where double storey product has long been the default.
The timing lines up with the numbers. Analysis by Forest & Wood Products Australia of ABS dwelling approvals data found single storey townhouse approvals rose 28 per cent between 2024 and 2025, from about 7,400 to roughly 9,500 dwellings.
For builders working in medium density, the launch says a lot about where developers want product to land: lower entry prices, smaller footprints and a buyer pool that runs from first home buyers through to downsizers.
Nostra’s five designs are aimed at compact lots
The Torcello, Tino, Nico, Cirello and Pietro offer two or three bedrooms, two bathrooms and either a single or double garage. Nostra says they were designed specifically for compact lots in communities where double storey townhouses have traditionally dominated.
The Tino is on the market now at Smiths Lane in Clyde North, in Melbourne’s south east, and Nostra expects the Nico to follow from November.
Nostra has been building in Melbourne since 2006, and medium density now makes up the bulk of its work. It works with developers across Victoria on detached homes, terraces and townhomes.
Developers want a wider spread of price points
Nostra Homes General Manager of Strategic Partnerships and Acquisitions Steph Soto said the push is coming from the developers Nostra builds for.
“Developers have been focused on helping first home buyers into the market,” Steph said.
“To support this, we’re bringing a wider range of price points to market by making the most of smaller lots and introducing single storey terrace and townhome product.”
Steph said the homes offer quality accommodation on a smaller footprint, a more accessible entry price and less maintenance, and that their appeal to downsizers and young families gives developers confidence in the depth of demand.
That last point matters for anyone pricing medium density work. A product that sells to one buyer group is exposed when that group pulls back. One that appeals to first home buyers and downsizers at the same time spreads the risk across two very different parts of the market.
Single storey townhouse approvals are growing from a small base
At about 9,500 approvals in 2025, single storey townhouses are still a small slice of the wider market. The jump is real, but it starts from a low number.
The same FWPA analysis found townhouses overall have held at around 17 per cent of total dwelling approvals, a share it described as relatively stable. Read together, the growth in single storey product looks more like a change in the mix inside the townhouse segment than a wholesale shift toward townhouses.
That is still significant for the builders who supply it. A change in mix alters what developers ask for on each release, and the plans, pricing and trade sequencing that go with it.
What counts as a single storey townhouse?
A single storey townhouse is a dwelling attached to one or more others, built entirely on one level, with its own ground level entry. In its building approvals data, the ABS counts semi detached, row or terrace houses and townhouses separately by number of storeys: one storey, or two or more storeys.
First home buyers and downsizers are after the same layout
Stockland National Wholesale Manager James Moussa, quoted in Nostra’s release, said housing diversity plays an important role in helping more Australians find a home that suits their lifestyle and budget.
“Thoughtfully designed single storey townhomes on smaller lots can provide a more attainable entry point for first home buyers, without compromising the functionality and quality people expect from a new home,” James said.
Nostra buyers Peter and Sonia, described in the release as first home buyers, chose a single storey townhome that puts them 103 metres from their son and four grandchildren.
“We wanted a larger open living area without stairs, and we didn’t want the heat that can come with a second storey,” they said.
“Location was a big factor, along with price and having a low maintenance garden. Our townhome has met all those needs. It’s just the two of us, so the layout works perfectly and it’s easy to look after.”
Their list is a brief in itself: no stairs, no hot upper floor, a garden that looks after itself, a price that works and a location that matters to them. None of it requires a bigger house. It requires a better arranged one.
None of it requires a bigger house. It requires a better arranged one.
Buyer incentives are aimed at the same end of the market
Nostra is launching into a market where both levels of government have moved on entry costs.
Since 1 October 2025, the federal 5% Deposit Scheme has had no cap on places, no income caps and higher property price caps, with the cap for Melbourne and Geelong set at $950,000.
In Victoria, the State Revenue Office says the temporary off the plan duty concession for apartments, units and townhouses now covers contracts signed before 21 April 2027. The state government describes the concession as applying to townhouses in strata subdivisions that create common property, so eligibility depends on how a project is titled.
That detail can cut across a common selling point, since plenty of turnkey townhouse product is marketed on having no body corporate.
Taking out the second storey changes the build
Single storey medium density is not simply a double storey plan squashed flat. It changes the job on site.
There is no upper floor system to frame, no stair to build and no second level of work at height on each dwelling. On a multi dwelling site, any saving in labour, scaffolding and program time is multiplied across the whole row.
The trade off is land. Putting all the floor area on one level means a larger slab and roof for the same internal area, and it pushes harder against site coverage and private open space requirements on a narrow lot.
The footprint is where the design work happens
Steph said the opportunity is not simply about making homes smaller.
“Single storey doesn’t have to mean compromising on the quality of the home,” Steph said.
“The opportunity is in designing the footprint differently. Buyers still want a home that feels spacious, functional and considered; we’re just finding new ways to deliver that on smaller lots.”
On a compact lot, every metre given to a hallway comes out of the living area or the yard. Open plan living, the position of the garage and how a plan draws light from a courtyard become the levers that decide whether a home feels generous or cramped.
That makes single storey townhomes a design problem before they are a construction one. When the plan works, the build is simpler than a double storey. When it does not, the product ends up competing with a small detached house down the street, and usually losing.
The Good Builder Take
Single storey townhomes are still a small part of the market, but the direction is clear and the buyer brief is unusually consistent. First home buyers, young families and downsizers are asking for the same things: one level, less upkeep and a sensible price.
For builders in medium density, the opportunity is less about a new product and more about a different kind of planning. The margin is won or lost on the drawing board, long before the slab goes down.
The stairs were never the selling point. What buyers are paying for is a home that works for the life they actually live, on a block they can afford. The builders who can deliver that on one level have a product with two very different buyers waiting for it.
Building medium density in your patch? We want to hear what buyers and developers are asking for. Get in touch with our team, and listen to the podcast for more conversations with builders working at the coalface.
Frequently asked questions
Analysis by Forest & Wood Products Australia of ABS data found single storey townhouse approvals rose 28 per cent between 2024 and 2025, from about 7,400 to roughly 9,500 dwellings. Townhouses overall held at around 17 per cent of total dwelling approvals.
Nostra Homes has released five single storey designs for compact lots: the Torcello, Tino, Nico, Cirello and Pietro. They offer two or three bedrooms, two bathrooms and a single or double garage. The Tino is on the market at Smiths Lane in Clyde North, with the Nico expected from November 2026.
Nostra Homes says its single storey townhomes are aimed at first home buyers, young families and downsizers. The appeal is single level living, lower maintenance and a more accessible entry price on a smaller lot.
The State Revenue Office says Victoria’s temporary off the plan duty concession for apartments, units and townhouses covers contracts signed before 21 April 2027. The state government describes it as applying to townhouses in strata subdivisions that create common property, so eligibility depends on how a project is titled.
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Last updated: 12 November 2026. Approvals figures from FWPA analysis of ABS data published 24 March 2026.
General Information Only. This article provides general information only and does not constitute financial, legal, tax or professional advice. Builders and buyers should seek advice specific to their circumstances. Figures and scheme settings are current at the time of publication and may change.
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