Sunbury Estate on Blocks as Greenfield Challenges Prevail

The balance of a sprawling residential estate in the greenfield ground zero of Melbourne’s north has been put on the block as headwinds prevail in the market.

Developer Townshend Group is divesting the remaining 205ha of its Canterbury Hills Estate at Sunbury, about 40km north-west of the Melbourne CBD.

It follows the Victorian government revealing its plans to target 800,000 new home builds in the coming decade to ease the state’s housing crisis.

The latest RPM greenfield market report indicated that Victorian land sales rose for the first time in 1½ years in the June quarter but challenges remained.

Its data showed lot sales across the Melbourne and Geelong growth areas grew by 13 per cent to 2146 lots—the first increase since the September, 2021 quarter.

However, it noted sales remained 53 per cent lower year-on-year with purchasers facing persistent affordability and serviceability challenges with interest rate increases in May and June significantly impacting borrowing capacity and being exacerbated by cost-of-living pressures.

As well, new supply slumped to its lowest level in four years with just 1853 new lots hitting the market as developers delay releasing new supply while turnover remains low and the average time on market is above 100 days.

RPM national managing director project marketing Luke Kelly said some developers had been offering significant rebates and incentives to drive lot sales.

“This activity created urgency in the marketplace with incentives between 5 and 10 per cent stimulating buyer activity from second and third home buyers and bringing forward their purchasing decisions during the quarter,” he said.

“We believe incentives are likely to remain in place during the second half of the year due to the affordability challenge for many buyers and the elevated level of resale blocks coming back on the market, typically at competitive prices compared to the available stock.”

Townshend Group is cutting ties with the Canterbury Hills Estate, which is among the largest in the area and so far comprises about 300 homes, after delivering 13 of its 46 potential stages.

▲ An aerial image of Canterbury Hills Estate, north-west of the Melbourne CBD.

The estate’s initial development masterplan was approved two decades ago and it is estimated more than 840 lots could potentially be delivered as part of the remaining stages.

Savills Melbourne director Julian Heatherich said the sale offered a well-timed opportunity to expand a neighbourhood in one of the country’s fastest-growing regions.

“With housing deliveries falling behind and around 60,000 incoming Sunbury residents forecast to 2041, Canterbury Hills Estate presents an immense opportunity to capitalise on the unwavering strength of Melbourne’s growth areas,” he said.

The remaining 85ha of the masterplanned area is being offloaded along with a 120ha Green Wedge parcel to the immediate north.

“In addition to the more than 840 lots, the opportunity incorporates scenic green spaces, medium-density housing potential and scope for circa 19 rural living lots,” Heatherich said.

Savills’ Benson Zhou, who is marketing the prime holding via an expressions-of-interest campaign with Heatherich, said the Sunbury corridor was “poised for a decade of transformative enhancements” with key developments inclduing the Sunbury Road upgrade, train line upgrade, hospital upgrade and surrounding precinct structure plans set to bring further amenities.