Homebuyers forced to go to extremes to get land in Sydney’s southwest as report reveals block "shortage"

Homebuyers forced to go to extremes to get land in Sydney’s southwest as report reveals block "shortage"

Homebuyers forced to go to extremes to get land in Sydney’s southwest as report reveals block "shortage"

Michael and Deanna Parzakonis bought a block of land in the Mirvac estate The Village in Menangle after their name was drawn out of a ballot.

Homebuyers have been forced to jump through hoops or play a form of Lotto to get blocks in new estates in Sydney's southwest amid a crippling land shortage and record demand for building sites.

It's come as land prices soared this year at the fastest pace in 15 years, with a Housing Industry Association report revealing state government failed to green light new lots fast enough to meet record demand.

Housing experts said the southwest has been at the centre of the land crisis due to the promise of a second airport at Badgerys Creek pushing up demand.

There has also be a trend of home seekers ditching inner city-living for Sydney's outer ring.

HIA economist Angela Lillicrap said low interest rates and government subsidies such as the HomeBuilder grant pushed demand up even further.

Developers have responded by reintroducing mechanisms such as lot ballots - lotteries where buyers have their name pulled out of a draw for the chance to get a sales appointment.

Other estates have charged buyers fees of up to $2000 for sales appointments, which are refunded if no sale ensues.

Buyers paying these fees were often required to register for appointments online at a specified time - a system similar to that used for popular concerts or music festivals.

Developers revealed these mechanisms were put in place, in some instances, to prevent buyers from going to extremes to get new lots.

There were multiple reports of buyers camping outside land releases in March and April, including at one estate in Oran Park, where buyers queued up outside the sales office for four nights.

One couple camping at the release told the Sunday Telegraph they still missed out on the chance to buy.

And even with many of the control measures like lotteries in place, land has continued to sell at a lightning pace.

Land buyers Jake and Rhiannon

Jake Strachan and Rhiannon Stowers bought land at Gledswood Hills estate The Hermitage, where about 500 people vied for 20-odd blocks.

Residential builder Sekisui House held a recent land auction and it took just an hour for all the lots to sell out. One buyer at the release in the Gledswood Hills masterplanned community The Hermitage spent more than $1 million on a vacant block.

Sekisui House general manager Craig D’'Costa said there was frenzy of buyer activity at the site. "It was quite feverish bidding on the day, the average price was around $750,000" he said.

The land auction came just days after the Urban Development Institute of Australia released a report also claiming the NSW government had been slow to release land, which was holding up construction and driving up prices.

NSW Treasury itself announced in June that 42,000 homes would need to be built every year over the next four decades - or 1.7 million by 2060 - to meet growing demand.

Southwest Sydney is now earmarked to pick up some of the slack with NSW Planning Minister Rob Stokes revealing new land in the area would be rezoned.

Land prices are increasing.

About 18,000 homes could be built in Glenfield, Lowes Creek Maryland, Leppington and Wilton, of which 2700 could be ready in three years.

The Hermitage in Gledswood Hills will eventually be home to about 2500 new dwellings.

First home buyers Rhiannon Stowers, 23, and Jake Strachan, 25, bought one of The Hermitage blocks under the hammer.

"It was crazy, we definitely weren't expecting how much demand there would be," Ms Stowers said.

The couple are planning to build a five-bedroom house on their newly acquired block.

"We just thought the southwest had a lot more opportunity," Ms Stowers said. "A lot of Western Sydney and the northwest are just so expensive . . . a lot of the blocks in those areas are just so small."

Mr D'Costa said the infrastructure in the southwest was its biggest draw. "The airport is obviously a big trigger point in itself, but what that's also done is provided stimulus for people to look at the region differently," he said.

Sydney land prices are by far the most expensive among capitals.

Michael and Deanna Parzakonis recently bought land in Mirvac estate The Village in Menangle in the outer southwest and said hunting for a block in the southwest was "stressful".

The couple were entered into a ballot with 300-odd buyers for the chance to get a sales appointment for one of about 30 blocks.

"Your number determines where you are in the pecking order," Mr Parzakonis said. "We were the 40th pulled out and, luckily, there were other buyers who backed out, so we got a block.

"It's ridiculous how much demand there is, especially for an area so far out. I'm just relieved it's over."

Source : www.realestate.com.au/news/homebuyers-forced-to-go-to-extremes-to-get-land-in-sydneys-southwest

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