Market Overview - NSW
NSW Market Overview from Henry Burke Colliers
Q. What are your expectations for the residential development sites property market over the next twelve months? A. We expect to see demand levels remain at a record high, which will result in record prices being achieved for development sites. We are currently appointed on approximately $1.1 billion worth of development sites. These sites range from boutique, high-end apartment sites through to large master-planned communities and residential land subdivisions. We are confident that the market will remain buoyant as we close out 2021 and focus on a strong market in 2022. Q. Talk us through the most significant deals you have transacted thus far in 2021. A. The first half of 2021 saw our team transact over $600 million worth of sites with a further $150 million recently exchanged or in due diligence in Q3 2021. Key transactions for Colliers Residential Sites team include: Bingara Gorge, Wilton, a residential land subdivision which sold for $220 million St Leonards & Crows Nest sales totalling over $200 million which range from townhouse sites to high-density mixed-use and residential apartment sites.
Q. What have been the fundamental drivers of demand amongst buyers? A. Low supply levels of sites in the marketplace, low levels of planning approvals, strong capital, and the low interest rate environment, all combined with the tight supply paradigm for new housing in the Sydney Metro market, have played a role. These factors have combined to drive strong levels of activity and subsequent demand for development sites in 2021 thus far. Q. Reflecting on recent transactions, what has been the profile of developers and has this shifted from previous years? A . Previous years saw the rise of the offshore developer, mostly fromAsia, whilst recent activity has been more localised. We are seeing strong enquiry levels from all developer classes, which ranges from small to medium sized private developers all the way through to large public companies looking for well-located residential development sites. Q. What types of sites are most in-demand given the current strong residential housing market environment? A. All residential development asset classes are in high demand, we’ve been active across all development types including residential land subdivisions, town house and apartment sites in the Sydney Metropolitan region. On average within each campaign, on or off market, we are experiencing approximately 15 offers across all development site classes. Q. How would evaluate the impact of the past eighteen months in the residential development sites market? A. Due to the uncertainty of Covid-19 we witnessed a relatively slowmarket in Q2 & Q3 2020, but we saw a surge in activity in Q4 2020 which has remained strong throughout 2021. The low levels of supply in the marketplace will be sure to further propel developer interest and activity throughout 2021.
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