A flagged NSW Government crackdown on “spot rezonings” is tipped to drive up prices for Sydney sites already zoned for mixed-use development.
NSW Planning Minister Rob Stokes recently signalled that he would push to end spot rezonings, which have been used to gain approval for new residential developments outside what is permitted under local planning guidelines.
The government’s stance will provide a significant boost for existing owners of zoned, mixed-use development sites – particularly those near existing or proposed rail infrastructure.
Our expectation is that larger sites that have already been zoned for medium density residential development will soar in value if spot rezonings are restricted.
The shift in policy is also expected to lead to a shortage of zoned sites over the next three to five years, particularly in Sydney’s high demand, middle-ring suburbs.
Developers are already reacting to the proposed changes, with a spike in enquiries for available zoned sites such as the redundant Auburn RSL club building and car park, on the northern side of Auburn railway station.
The 11,848sqm, Northumberland Road site has a B4 Mixed Use zoning and is expected to support a major residential development, comprising over 400 apartments.
We’ve been fielding particularly strong enquiry for zoned sites such as Auburn from both local builder/developers and from groups seeking build-to-rent opportunities in Sydney’s middle-ring suburbs, where that style of project is becoming increasingly viable.
Developers are particularly focused on sites near existing or proposed rail infrastructure to cater for the close to 36,000 new dwellings required in Sydney each year up until 2036 based on current population growth projections.
CBRE’s research report, A New Train of Thought, forecasts that the Sydney Metro Rail initiative will alone spur an estimated $1.4 billion in suburban Sydney development each year for the next decade through the upgrade of 16 stations and the creation of 15 new stations.
The initiative will deliver 66 kilometres of new rail across pockets of Greater Sydney, with driverless trains arriving every four minutes during peak periods.
The North-West rail line recently opened for service, with the CBD & South-West line to be delivered within the next five years. It is expected to reduce commute times and has the potential to impact median house prices through artificial price growth via development and provide alternative options for companies to conduct business by spreading rental costs across newly commutable markets.
Station areas forecast to have above-average development spending include: Sydney CBD, Macquarie Park, Rouse Hill, Marrickville, Epping, Waterloo, Kellyville, Bankstown, and Chatswood.