Private developers are snatching up prime vacant land across Sydney in anticipation of the second wave of first homebuyers according to Colliers International.
The property group said the strong interest was in full display during the recent sale of a 400 sqm vacant block at 66-68 Riley Street in Darlinghurst where 23 contracts were issued to mostly private developers for the site.
"There were almost 50 bids from seven serious bidders, which reached 40% above the reserve at $2.35 million. These private developers are planning for the next wave of first homebuyers, which is expected for 2011. It was an indication of more activity to come," said Paul Fernandez, director of investment sales at Colliers International.
Colliers International also sold a development site (2188 sq m) in Oxley Park, Western Sydney to a private developer for $585,000 on the same day of the Darlinghurst auction.
Fernandez said the strong demand is buoyed by the current low interest rates offered by the lenders.
"Developers are realizing that now is the perfect time to buy sites as interest rates are at record lows and buying now will ensure projects will be completed or near completion by the next expected first homebuyer surge," he said.
Curtis Field, national director of site development at Colliers International said that Sydney's South West housing market has seen significant activity following a prolonged period of relatively no sales in new housing estates.
"This buyer-led demand has been reflected by a resurgence of interest in development land in this market. Properties under $500,000 this year will play a major role in the real estate market recovery in 2010 and developers want to make sure they are cashing in on that trend," he said.
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