CBRE says townhouse site sales lift as focus shifts to Sydney's middle market

CBRE says townhouse site sales lift as focus shifts to Sydney's middle market
CBRE says townhouse site sales lift as focus shifts to Sydney's middle market

Investors and developers looking to capitalise on Sydney's residential boom are now turning to townhouses as the product of choice.

The trend has emerged amid the state government's push to develop the 'missing middle' of NSW's housing sector. 

According to CBRE Metropolitan Investment team manager Xavier Rahme, investor demand had shifted over the past nine months from apartment development sites to those that could accommodate townhouse projects.

“Sydney's housing sector is significantly undersupplied in the middle market, which is driving investors and developers to secure parcels that can capitalise on this untapped area of the market,” Rahme explained.

“The NSW Government's recently launched Missing Middle Design Competition highlights the emphasis on this important sector of the market – with a shift away from apartments to medium density development,” he said.

Rahme cited the recent slowdown in growth of the residential unit market as the reason developer interest has spiked in townhouse development opportunities.

“Interest remains strong in apartment sites in blue-chip locations within 10-15km of the Sydney CBD and close proximity to train stations,” he said.

CBRE has transacted more than $48 million across five recent property sales throughout metropolitan Sydney, highlighting the increased demand for developable townhouse stock.

In Lindfield, a 2,719 sqm property at 18-20 Bent Street sold for $13 million. The property, which was purchased by a foreign buyer, has development approval for 16 townhouses.

A 1,006 sqm property at 66-70 Stanley Street in Burwood with development approval for 10 townhouses recently sold for $6 million, while in Turramurra a site earmarked for 15 townhouses sold for $8.05 million.

Other recent transactions include an undisclosed sale of a 10,005 sqm parcel at 221 North Rocks Road in North Rocks. The property has development approval for 50 houses.

“These recent townhouse development site sales demonstrate the strength in demand from developers for this type of stock, which is driven by the vigorous demand for 'missing middle' housing across Sydney,” Rahme added.

“Market feedback has indicated that banks and financial institutions are more enticed to lend on lower risk assets including townhouse developments, where pre-sales rates are particularly buoyant.”

 

Tags: 
CBRE Townhouse Market

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