_Local and foreign buyers become more evenly spread for collective site sales in Australia

Collective site sales suitable for low, medium and high density development made up 16.5% of total disclosed sales in 2017/18; representing seven times more than five years ago. 

These collective sales include horizontal sites, with multiple homeowners banding together to form amalgamated residential super-lots; and vertically, with owners of individual apartments, office and industrial suites within a building.

Although the portion of collective site sales was lower than recorded in 2016/17, when represented 20.4% of exchanged sales, the nature of this type of transaction tends to equates to longer settlements. So effectively, there are likely to be more transactions backdated in this period, once settled.

Across Australia, when analysing buyer nationalities, local buyers dominated horizontal site sales with almost 82% of total collective sites five years ago, by value. The split of foreign buyers purchasing collective horizontal sites grew to 56.9% in 2014/15, to more recently record 17.7% in 2017/18. This follows a number of large non-collective sites being transacted. 

In this last year, foreign and local buyers represented a reasonably even spread between horizontal and vertical collective site sales compared to previous years. Foreign developers established in the market, are now proving comfortable exploring this type of purchase.

Vertical collective sales suitable for higher density in New South Wales were 17.3% of total sales in 2017/18, up from 3.8% two years earlier and prior to strata legislation reform. This legislation has encouraged the upgrade of buildings not currently reaching full potential and to curb urban sprawl.

A similar strata reform is proposed in Western Australia, with the Strata Titles Amendment Bill 2018 currently with the Standing Committee on Legislation for review. 

Read our latest Collective Sales for Residential Development Market Insight here.