Savvy Homeowners Band Together For $6.637M Sale

Savvy homeowners in Melbourne’s eastern suburbs are banding together to combine properties, as they look to capitalise on increasing demand for residential development opportunities.

Demonstrating this trend, CBRE’s Victorian Development Sites team of Julian White, Mark Wizel and Josh Rutman recently negotiated the sale of 5 High Street and 2a Scott Grove, Glen Iris.

The adjacent properties, which offer a combined area of 1,644sqm, sold for $6,637,000 to a prominent local developer, following a competitive Expressions of Interest campaign.

The sale price represents a rate of $4,000 per sqm – a strong result which Mr White linked to increasing demand for residential sites from offshore and local developers.

“Developers are looking to take advantage of the imbalance of apartment demand versus supply in the eastern suburbs, with the site receiving considerable market attention for its favourable General Residential zoning," Mr White said.

“We are witnessing an increasing acceptance of apartment living in suburban markets, particularly in prestigious suburbs such as Glen Iris, where medium house prices of $2 million plus inhibit freestanding home ownership. Apartments are leading as a viable alternative as they offer all the access to amenity for a fraction of the cost."Mr White added continued developer confidence in the pre-sale apartment market was another driver for the sale, as apartment sites in the eastern suburbs become harder to secure and planning permits become more difficult to obtain.

“To capitalise on developer demand, group selling is becoming increasingly popular, as homeowners look to partner with neighbours to sell their homes for significantly higher returns than what can be achieved by selling sites individually,” he said.

“Both the properties in this instance were purchased less than 18 months ago, with the vendors making big margins of around 100 per cent from what they paid.”

He said another major factor impacting the eastern suburban market was the arrival of Chinese developers, who over the past 12 months have begun transitioning from the CBD to actively targeting the suburbs.

“Many offshore developers are familiar with the eastern suburbs market through family living in Australia. Suburbs such as Glen Iris, Kew and Canterbury are highly regarded by many locally based Chinese families, therefore when an offshore Chinese buyer is looking to acquire a site, these areas are high on their preference list," he said.

“Whilst 1455 High Street & 2a Scott Grove was acquired by a local developer, the majority of bids received were from offshore Asian groups.”