Our cities have long understood how to design apartments and how to preserve the terrace house. What they've struggled to deliver, particularly in their most desirable suburbs, is what sits in between, townhouses and other "missing middle" typologies. It's housing that is increasingly recognised as critical in inner suburbs, where demand for homes outstrips supply and traditional detached housing is not viable for many buyers.

Neometro 97 Alma Road, St Kilda East

A national pattern

The gap is not unique to one city. In Sydney, the state government has spent the past two years trying to close it through planning reform. Stage 1 of the Low and Mid-Rise Housing Policy, which commenced on 1 July 2024, permitted dual occupancies and semi-detached homes in low-density residential zones. Stage 2 went further, opening up terraces, townhouses and low- and mid-rise apartments in residential zones within 800 metres of town centres and train or light rail stations across Sydney, the Central Coast, Illawarra and the Hunter.

Sitting alongside the rezoning is the NSW Housing Pattern Book, launched in July 2025. It offers eight government-endorsed terrace, townhouse and manor house designs by architects including Carter Williamson, Sam Crawford Architects, Other Architects, NMBW Architecture Studio and Officer Woods, aimed at families, young people and downsizers. The intent is to pair good design with speed, allowing approval turnaround as fast as 10 to 20 days.

It's a deliberate attempt to do what ad hoc infill has failed to do for decades, make well-designed medium density the default, not the exception, in established suburbs close to transport and amenity.

Neometro 97 Alma Road, St Kilda East

Why families are choosing townhouses

Families are among those most affected by the lack of housing options. They want proximity to good schools, to cafes and parks, and to the cultural life that drew them to inner Melbourne in the first place. Increasingly, families are gravitating toward townhouses because the format suits the way they want to live. Well-designed townhouses prioritise light, efficient plans and outlook. Gardens are manageable, and homes are low maintenance rather than an ongoing project. And unlike a freestanding house behind a fence, a well-designed townhouse comes with an in-built sense of community. Shared gardens, walkways and entries mean neighbours become a natural part of daily life.

Suburbs missing their 'middle' housing

Across Melbourne's inner ring, there's a pattern of suburbs with extraordinary amenity and very little or no medium-density housing. Suburbs like St Kilda and St Kilda East offer few choices for people actively considering townhouses. There are the grand subdivided homes and heritage walk-ups that shaped the suburb's character over a century, and apartment towers that arrived later, largely serving investors and short-term occupants. What's missing is the middle ground.

Melbourne's longest-standing socially focused and design-led development group, Neometro, has been delivering well-designed townhouses in the inner suburbs for more than four decades. Neometro's most recent townhouse project was awarded the country's top honour for well-designed homes, a 2024 Houses Award for 57 Martin Street in Thornbury.

Neometro's 97 Alma Road project in St Kilda East includes a series of townhouses designed to accommodate a range of lifestyles. Space, achieved through voids and double-height spaces, light and a strong connection to landscape, including strategic garden entries rather than a carpark entry, are embedded into the development.

Neometro 97 Alma Road, St Kilda East

Neometro Director Lochlan Sinclair says there is strong demand for move-in-ready homes.

"There's a growing desire for medium-density housing, like townhouses, in vibrant neighbourhoods," he says. "People want to stay connected to the suburb they know and love. The townhouse, when it's properly designed, lets them do that without the financial and physical burden of maintaining an older freestanding home."

Good design is good value

An architect-designed, energy-efficient townhouse purchased off the plan arrives ready to live in from day one. High sustainability ratings translate to lower running costs, and new materials and fixtures don't require the same kind of ongoing maintenance that older houses demand.

"There's real value in a home that doesn't ask you to fix it before you can enjoy it," Sinclair says. "We've found that less maintenance means more time for people to spend enjoying their neighbourhood and lifestyle."

Buying off the plan also brings financial advantages, with longer settlement terms and transparent pricing without the uncertainty of auctions or the pressures of a competitive market.

Sinclair says Melbourne has committed to delivering hundreds of thousands of new homes in existing suburbs over the coming decade, which can't be achieved through apartments alone.

"The question for Melbourne isn't whether more diverse housing gets built in established suburbs," Sinclair says. "That's already settled. The question is whether we design it well and whether the homes we add make the neighbourhood better for being there."

Neometro 146 Union Street, Brunswick

In Brunswick, Neometro's upcoming 146 Union Street project is an all-townhouse development, a collection of three-bedroom homes in another of Melbourne's most established inner suburbs. The project has seen strong demand from a mix of buyers at various stages of life, including families drawn to the quality and considered design. Like 97 Alma Road, it reflects Neometro's conviction that the townhouse format belongs at the heart of the inner city.

Whether Melbourne can deliver at anything like the scale Sydney's reforms are now attempting, without equivalent planning reform of its own, remains an open question, and increasingly, the one that matters most for the suburbs still waiting on their missing middle.

Images: Supplied

Architecture & Design Team

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