Scarcity of land available for development combined with permit knock-backs in Melbourne’s south east is driving a rush towards prime sites north of the CBD, according to PermitReady.com.au.
The online portal works closely with agents across the nation to list development sites for sale and has recently seen an uptick in buyer demand for boutique projects in the suburbs of Preston, Coburg and Thornbury.
Permit Ready data reveals 21 permit-ready sites changed hands in Melbourne’s north in the six months to December 2016, compared to just nine in Melbourne’s south-east over the same period according to listings on the portal – 133 per cent more transactions in Melbourne’s north.
Research by the company also reveals property developer enquiries into these suburbs has swelled by 27 per cent in the six months to December 2016, with an average of 42 enquires per property per month compared to the previous six months, which saw an average of 33 enquires per property per month.
Permit Ready Managing Director Nick Materia says enquiry levels for Melbourne’s North is also a result of developers looking to capitalise on its close freeway and transportation linkages.
200-216 Sydney Rd, Coburg, which sold for more than $13 million. The site was listed on PermitReady.com.au.
“Developers in these Northern suburbs are noting consumer demand for townhouse-style projects, particularly given the area’s ability to provide good amenity and broad lifestyle options,” Mr Materia said.
Permit Ready is listing more than one third of current properties on the market in Melbourne’s North, with 100-plus listings in the past six months, with enquiries for property in the North reaching at least double that of similar properties in Melbourne’s West.
Just nine kilometres from Melbourne CBD, Preston has also experienced continued growth over the past few years where apartment prices have increased nearly 5.5% and house prices jumped by 9.3%, according to data sourced from CoreLogic.
This site at 171 Moreland Rd, Coburg, sold for $1.52 million last year with a permit for five double-storey dwellings.
Discussion in the development community is focused on finding “unique projects in previously underperforming or undercapitalised market areas” where supply is yet to catch up to the bourgeoning level of demand, Mr Materia said.
Leading commercial agency Melbourne Acquisitions - sought by developers to both source and market new development opportunities – said there has been a substantial increase in requests for sites north of the Yarra.
“Buyer enquiries received from residential developers including institutional groups are preferably seeking townhouse sites either permitted, infill or suitable for rezoning to cater for townhouse projects,” Managing Director Dominic Gibson said.
“In particular, the middle-ring north of the metropolitan markets are most sought after at present – this is a result of the reasonable, entry-level median house prices that enable developers to get a foot in the door and achieve a realisable and healthy return on investment”.
Overall, 2016 was a strong year for Permit Ready with over $1 billion in development sites sold after being listed on the development site portal.