- Knight Frank NSW recorded $90M in investment sales during the June quarter
- 62% if sakes were for development sites or properties with such potential
- Sites can be transacted easily during lockdown due to no need to inspect the site
Demand for development sites in New South Wales remains strong despite the continued lockdown, according to data from Knight Frank.
Almost $90 million in investment sales was negotiated by Knight Frank NSW during the June quarter with 62% for development sites or properties with such potential, accounting for about $68 million.
More than $10 million of strata office sales were also recorded.
Some notable sales included a $1.4 million for 527 Victoria Ryde which has been approved for a boarding house development along with a development application approved residential development site in Lithgow for $8.4 million.
Grant Bulpett, Knight Frank’s Head of Investment Sales NSW said activity in the state had been the busiest during the past ten years, although the extended activity has slowed activity from vendors.
“We have seen across the state that the strength of our transactions proves there is still a large quantity of active capital in the marketplace looking to acquire development sites – in particular those that have limited planning or DA risk,” said Mr Bulpett.
“While many vendors have adopted a wait-and-see approach during lockdown, owners that have chosen to place their properties on the market during this period are reaping the rewards as large buyer numbers compete over limited supply.”
Grant Bulpett, Knight Frank
Mr Bulpett said he expects vendors to capitalise on the pent-up demand that is currently being witnessed during the lockdown.
“We are expecting the supply versus demand dynamic to shift post lockdown as the accumulation of development sites hit the market, offering buyers more choice.”
He added that demand for residential development sites was strong and could be transacted during the lockdown as they did not need to be physically inspected.
“We have seen an increase in interest and activity over the past 12 to 18 months in greenfield development sites that can produce 50 to 150 housing lots – in particular those that sit in the emerging markets of North and South West Sydney,” he said.
Anthony Pirrottina, Knight Frank’s Associate Director Investment Sales, said assets across all markets had been trading at record prices in the lead up to June.
“Our team experienced a 100 per cent clearance rate through the first six months of the year, with purchasers eager to secure commercial assets throughout Sydney,” he said, adding that there had been a larger appetite for development sites in established inner-ring locations.
“These developers had slowed down their acquisition mandates over the last 12 months due to slow pre-sales, a lack of overseas purchasers, increased lending scrutiny, and a resistance from purchasers to buy off the plan due to media coverage of sub-standard construction, but we are now starting to see signs that some of these fears have subsided.
“The heat in the development market is coming off the back of rising house prices, and developers are clearly in acquisition mode.
Anthony Pirrottina, Knight Frank
