Collective-site sales suitable for low, medium and high-density development increased six-fold over the past five years, recording 17.8% of disclosed total sales (by value) in 2016/17.
Knight Frank’s September 2017 market insight, Collective Sales for Residential Development, found that this has been both horizontally and vertically, which meant that multiple homeowners grouped together to form residential super-lots, while owners of individual apartments and office suites simultaneously leveraged recent legislation changes and re-zoned growth corridors.
Knight Frank head of residential research Michelle Ciesielski said foreign buyers represented only 21% of collective sales in 2012/13, but by 2016/17 that number had risen to 62% .
“Within these collective sales purchased by foreign buyers in the last year, 53.6% were for horizontal sites and 8.4% for vertical sales,” Ciesielski said.
“Vertical site sales have been more prevalent in New South Wales since new legislation for strata properties came into operation.
“At this stage, despite lengthy consideration, no other State or Territory Governments have introduced this change,” Ciesielski said.
The share of NSW vertical collective-site sales suitable for higher density grew to $228.3 million (8.1%) in 2016/17, when compared against the total volume of disclosed higher density residential sites sold.
This followed the reformed legislation coming into operation on 30 November 2016, after representing 2.3% a year earlier.
“Despite significant growth in apartment values, developers are taking a longer term view when purchasing NSW collective vertical sites. However as yet, this isn’t the trend emerging out of Victoria,” Ms Ciesielski said
According to Residex, the median value of established apartments in greater Melbourne has increased by 13.5% since since July 1, 2015.
As a result, collective vertical sales in Victoria recorded a share of only 1% in 2016/17 — tallying at $18.5 million.
This was down from a year earlier with a 2.5% share ($39.7 million) in 2015/16.
“With this reform, many more potential development sites have the ability to be unlocked across Greater Sydney,” Ciesielski said.