Townhouse site sales lift as attention shifts to Sydneys missing middle
Townhouse site sales lift as attention shifts to Sydney's 'missing middle'
| 15 May 2017
Townhouses are emerging as the next hot ticket item for investors and developers looking to capitalise on Sydney’s residential ‘boom’, amid the State Government’s push to develop the ‘missing middle’ of NSW’s housing sector.
CBRE’s Xavier Rahme said over the past nine months, investor demand had shifted 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,” Mr Rahme said.
“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.”
Highlighting the increased demand for developable townhouse stock, CBRE has transacted more than $48 million across five recent property sales throughout metropolitan Sydney.
In Lindfield, a 2,719sqm 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 1,006sqm 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 10,005sqm 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,” Mr Rahme explained.
“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.”
Mr Rahme went on to say townhouses were emerging as the product of choice.
“The recent slowdown in growth of the residential unit market has spiked developer interest in townhouse development opportunities,” Mr Rahme said.
“Interest remains strong in apartment sites in blue-chip locations within 10-15km of the Sydney CBD and close proximity to train stations.”
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.