Canberra is set for a record year for multi-unit development sales according to property specialist, Colliers International.
Analyst Dominic Aungles says so far more than $200 million of sales have been notched.
“Nominally, it was higher last year at nearly $400 million ($396.9 million), but those figures were skewed with the Denman Prospect englobo sale of $241.3 million,” he says.
“Englobo sites don’t get sold every year. If we take this out of the equation to make the figures more comparable then there has been an increase in development site sales of about 20 per cent from 2015 to 2016.”
Aungles says the sale of two government buildings in the inner city and the entry of the private sector into land sales were big contributors to the sales figures.
“This is the first year the private sector has brought land for sale to the market, such as development sites in Denman Prospect, Watson and Ginninderra Estate,” he says.
Private developers also have interests in the Ginninderra CSIRO site, West Belconnen, Googong, South Jerrabomerra, Woden, Kingston, Campbell and the inner North.
The LDA holds and has land supply in Lawson, Moncrieff, Throsby, Lawson, West Belconnen, Crace, Denman Prospect, Coombs and Wright.
“Previously the Land Development Agency has been predominantly responsible for land releases,” Aungles says.
Colliers Land Sales Executive Josh Reid says demand for development work is becoming more competitive as builders are beginning to move into small to medium development sites.
“Builders who have typically bought single residential land lots have had a lot of success building homes in new estates,” he says.
“They’re growing in confidence and have found an appetite to move into building small-to-medium development sites to grow their capabilities and diversify their business.”
Reid highlights three townhouse sites within a larger development in Watson that Colliers is taking to the market this week via an expression of interest.
“These are expected to attract strong interest from private sector SME developers,” he says.
Reid says the builders are attracted to the townhouse product because of demand from homebuyers.
“The land component makes them a more affordable option,” he says.
“We’ve seen a lot of those types of sales in Coombs and Denman Prospect where settlement isn’t due until 2018.
“This gives builders time to organise pre-sales,” Reid says.