Neighbours in Melbourne are increasingly banding together to put their residential properties to market conjunctionally as they look to capitalise on strong appetite for development sites.
Colliers International has witnessed firsthand a growing trend among property owners to create boutique, blue chip development sites by selling their neighbouring properties together.
Ben Baines, Colliers International Senior Executive – Investment Sales, said the practice was becoming increasingly common following residential zoning reforms which were gazetted in July last year.
“It has made a number of main road properties far more valuable as development sites rather than existing homes,” Mr Baines said.
“Developers of all size are attracted to these boutique sites for the blue chip locations they tend to be in, where there is a significant gap in median house and apartment prices.”
The latest such property set to hit the market offers a combined corner site of around 830 sqm.
The properties at 1520 High Street and 65 Erica Avenue in Glen Iris are zoned General Residential Schedule 3, which could allow for multi-level residential development or alternative uses such as childcare.
“This is the third multiple house site Colliers International’s metropolitan sales team has been appointed on in recent weeks,” Mr Baines said.
“We also concluded two recent sales of similar nature at 1271-1273 High Street in Malvern and 1067-1069 Toorak Road in Camberwell which were purchased by a developer and childcare operator respectively. Both achieved 35-45 per cent more as a ‘site’ than what would have been achievable as a residential house.
“This site features two separate houses and owners who have come together to create a more expansive, desirable site.”
Surrounded by some of Melbourne’s most expensive real estate, where the median house price sits around $1.4 million, Mr Baines and colleagues Ted Dwyer and Hamish Burgess expect the properties to attract interest around the mid-$2million mark.
“This site would be well suited to higher density development due to its close proximity to the Monash Freeway, public transport, recreational facilities such as the Harold Holt public pool and Central Park, schools such as Sacre Coeur and Korowa and retail shops on Malvern Road, High Street and at Tooronga Village,” Mr Baines said.
“The site is elevated and has a natural slope, allowing for outstanding aspects with any potential higher density development.”
Colliers International’s Peter Bremner and Hamish Burgess are also selling two neighbouring sites at 831-835 High Street in Kew East, with expectations of buyer interest in the vicinity of $6million.
Combining these two neighbouring sites would create a substantial dual block of 2,377sqm, with High Street frontage of 30.5m.
“Site feasibility from the Buchan Group provides for a 52-apartment residential development on this site,” Mr Burgess said.
“The recent changes to residential zones has opened the door for residential owners in the area to join sites and create a strong windfall as a result of their development potential.”