_Enquiry still strong for well-located Australian residential development sites

Residential development site sales were at $8.56 billion across Australia 2017 – down 14.3% in the past three years according to the Australian Residential Development Review 2018. 

Overall, Australian Residential development site sales have moderated but enquiry is still strong for well-located sites. The results follow an incredibly strong period of growth, led by NSW when rezoning was ramped up in 2014.

Over the past three years, total site sales have fallen 14.3% from $10 billion in 2015 with all states and territories recording a similar or lower volume of sales, with the exception of Victoria.

Victoria bucked the trend with an increase in both medium-density and higher-density sites. Interestingly, the gap in total sales between NSW and Victoria reduced from $2.7 billion in 2015 to $79 million in 2017. 

In 2017 there was also activity in less-populated states and territories with the Australian Capital Territory recording $177 million, South Australia at $66.3 million and Tasmania at $6.1 million of residential site sales.

Foreign buyers purchased 42.7% of all development sites, by value, over this time. Almost 87.1% of these sales occurred in Greater Sydney and Greater Melbourne with the remainder occurring outside Australia’s two most populated capital cities. 

A similar analysis completed for the three years earlier resulted in 92.4% selling in the two cities. This has reflected the willingness of foreign developers and investors to now diversify across the country. 

Despite the tightened outbound capital controls remaining in play by the Chinese Government, China still represented the largest portion of all foreign purchasers with 31% of all disclosed sales.

Japan (3.0%) followed, with Hong Kong and Singapore both at 2.8%. Slightly lower with a 2.6% share, Malaysian developers saw most of their transactions happening in Greater Melbourne.

Read our latest Australian Residential Development Review here.