Okay kiddo, have you ever seen a row of houses that all look connected to each other like they're all holding hands? Those are called terraced houses!
In Australia, lots of people live in these types of houses because they can fit more houses in a smaller space. It's kind of like a puzzle - if you put the houses all next to each other, there would be no space left for anything else!
So instead, they build the houses one right after another, and each house usually has its own little yard or garden. Because the houses are all connected, they share walls with each other. This means that if you're playing music really loud in one house, your neighbors might be able to hear it too (and they might not be too happy about that!).
But living in a terraced house can also have some benefits. Because the houses are close together, it's easier to make new friends with your neighbors. Plus, since there are so many houses in one area, there are usually lots of shops and parks close by too.
So, in summary, terraced houses are a type of house in Australia where a bunch of houses are built right next to each other, sharing walls. They're built this way to save space, and while it might mean you have to be a little quieter sometimes, it can also be a great way to make new friends and have lots of fun things to do nearby!