The month in review: Sydney
By Herron Todd White
The south west local council areas of Liverpool, Campbelltown and Camden on the fringe of the metropolitan area have seen an enormous amount of land release in the past five years as part of the south west growth corridor.
Many of the new land release estates such as Edmondson Park, Leppington, Carnes Hill and Glenfield are situated in these council areas and are located around growth centres where the improvements to infrastructure such as the South West Rail Link and approval of Badgerys Creek airport will improve accessibility to the region and promote job growth.
Typically these estates offer a standard block size of between 300 and 450 square metres and sell from $300,000 to $450,000. Demand has been very high with many sales snapped up early in the pre-sale period. Agents have even witnessed people camping overnight, either on blocks or at the sales office to purchase the best blocks first.
The north west growth corridor is still in planning stages in comparison with large tracts of land recently rezoned and proposed for subdivision within the Blacktown LGA along Blacktown-Richmond Road. New subdivisions have recently come on line in Marsden Park where work has also commenced on a substantial new business park which will provide employment opportunities in the area.
The emerging market within these estates has been the split contract. This is where the buyer enters into a contract to buy a vacant parcel of land, subject to entering into another contract at the same time to construct a dwelling, an advantage to the purchaser as stamp duty is only paid on the vacant land transfer. However this product has caused many issues with lenders as it appears that the vacant block does not have a stand-alone value because of the requirement to build. The requirement for lenders is to have a valuer provide an “as if complete” assessment especially if the property is to be completed with walls attached to the neighbour’s.
The recent interest rate cut will fuel an already increasing demand in this region as an affordable living option as the Inner and middle ring suburbs become more and more out of reach for the general house hunter.
Within the Holroyd LGA and Parramatta LGA we have seen a trend where dwellings with blocks that comply with council regulations are being knocked down to make way for a duplex subdivision. These basic homes which would be worth much less if on a smaller block have been selling for large amounts due to this subdivision potential and the added appeal of modern duplex residences which are well received on completion.
In the northern suburbs of Sydney from Hornsby to the beaches, large scale land releases as seen in the outer areas are long gone with the only option for buyers being to purchase an older house to knock down and build their dream home.
Larger scale developments can be found around North Kellyville where former semi rural lots have been amalgamated and developed. Prices in these areas start from circa $560,000 for a 450 square metre block. These areas have proven to be popular due to the rise in values of inner suburbs to the east pushing families to look further west to get better value for money and from families already living within the area looking to rebuild and stay within the same zone for schools and access to employment areas.
The odd vacant parcel of land close to the inner city in the current market has been extremely popular with a wide variety of opportunities available to capitalise on. With minimal vacant land, many are opting for the older style knock down homes (1950s post war fibro cement sheet dwelling), typically 15 to 20 kilometres from the CBD on seemingly larger land parcels which present potential for subdivision and dual occupancy development. Many small scale or first time builder/developers and mum and dad investors are following the trend of dual occupancy developments.
The most awaited new land release was Greenhills Beach by Lend Lease in the beachside suburb of Cronulla back in 2012. Most lots ranged from level 550 square metre to the odd 680 square metre block with potential ocean views. The market responded well with many lots being snapped up in the early weeks all representing good value and a unique opportunity, selling between $690,000 to $1 million.
Since this initial release, two thirds of the lots have now been built on with the new dwellings ranging from single level project homes to architecturally designed homes with rooftop terraces for ocean views. Some of these homes have since been on-sold with the market responding well and prices ranging from $1.7 million to $2.4 million.
After such a good response to this subdivision, Savelle has recently released Shearwaters Landing, the new land release next to Greenhills Beach. Stage One has been recently released to the market with sales off the plan as the estate is still in construction phase. On completion, this new estate will offer a mix of level building lots, to gently sloping blocks with views.
Six of the most anticipated lots within the initial release went to auction in early March 2015. The blocks ranging from 700 square metres to 800 square metres have direct rear access to Wanda Reserve and uninterrupted views of Bate Bay and Cronulla Beach. As such they have been the talk of the shire, with locals astonished at the results. Auction prices achieved ranged from $2.2 million to the highest at $2.675 million.