According to The Australian Financial Review today, as values peak, a growing number of east coast development sites are being listed for sale with those carrying a development permit attracting premium pricing.
Sydney-based Alpha Fund has listed a DA-approved site in Sydney's Waterloo, near the future new township of Green Square.
The fund purchased the 1436 square metre site at 713-717 Elizabeth Street in 2013 for $12.5 million and spent the last two years pursuing a development application (DA) permit for a four-storey apartment block with 36 units and a communal rooftop terrace with views of the Sydney CBD. One third of the apartments have already been sold off the plan.
In Brisbane, Metro Property Development is marketing its Montpelier Road site in the inner north eastern suburb of Bowen Hills, which has a DA permit underway and for which it paid about $25 million in late 2014. Deloitte Real Estate's James Walsh and Ray White's Rick Bird are marketing the site which can yield 509 apartments across five eight-storey towers.
"Two years ago, there wasn't a premium on sites with a DA, people were happy to wait and get their DA. It was like the gold rush, people were waiting for things to go up in value," JLL's Sam Brewer who is marketing the Waterloo site, said.
"But now the market has stabilised."
Despite the changes, prices of sites remained high and at a premium. No one is losing money, not even in broader western Sydney where speculations of a housing crash are rife, CBRE's Alex Mirzaian said.
"I have 100 inquiries for fives sites, raw or with DA," he said.
"Yes, apartment sales are slowing, you could sell 200 in one weekend in the past, now it's about 30 to 40. And it is true that there is a certain point when developers had bought their sites for too much . . . the whole feasibility of the site is then thrown out of the window."
But there is still a rush of developers who are looking for ready-to-build sites to keep the building pipeline flowing, all the agents confirmed.
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