Small blocks of land with active electrical substations in Sydney’s north have sold for up to $1.8m as buyers fight to enter Australia’s mostexpensive housing market.
The high prices for the tiny blocks, which come with complex challenges for architects and builders, is yet another sign of Sydney’s housing shortage, said Tim Lawless, research director at Cotality, formerly CoreLogic.
Lawless called it “a sad indictment on the availability of strategically located developable land” in a city of 5.5 million people.
Two of the blocks have already sold for $1.8m and $1.43m, according to real estate agent Simon Harrison, outstripping the city’s $1.2m median house price as estimated by Cotality.
“In 25 years, I’ve never sold anything like it in my career,” said Harrison, principal at Belle Property.
Energy company Ausgrid said it would continue to access and maintain the electrical infrastructure but is selling 21 land parcels across Sydney because it no longer needs the entire blocks.
The sites have attracted hot competition from first home buyers, builders and neighbours who want to expand their landholding, Harrison said.
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Most of the blocks are much smaller than theaverage house siteof 400 sq metres (478 sq yards), with one 240 sq metre block selling for $800,000.
Another block is on offer for $300,000 despite being only 50 sq metres, a quarter of which is taken up by the power box, with the remainder home to a roofless street corner shed overshadowed by a frangipani tree.
Mosman council on Sydney’s lower north shore says it has received many inquiries about the substation blocks but applications for home construction would have to show the dwelling would be safe to live in, a spokesperson said.
“The construction of a dwelling house on them is, in theory, possible [but] this may be difficult to achieve due to the constraints of developing a very small site containing an electrical sub-station,” they said.
Developers would have to leave a clear space to access the boxes, taking a chunk of at least 12 sq metres out of any site. Some substations emit a low hum, but they have no radiation or emissions and pose no safety hazards to buyers, Harrison said.
Four weeks ago, Mosman resident Ed Blakely saw one of the sites near his home list for $475,000. He said his daughter had considered buying it to get into the housing market.
“Here’s a chance to start,” he said. “After two years or so, she could borrow against it to buy a house.”
He said his neighbours hoped the government would buy it to house amenities servicing the area’s new apartments, such as electric car charging stations.
Otherwise, the site could be a rental studio or Airbnb but it would be too small to live in permanently, said Blakely, a former professor of urban planning at the University of California.
“You’d be kicking yourself every day – can you imagine living in a one-room place, your stove in the same place you’re sleeping?” he said.
The size of suburban blocks has shrunk in recent decades, but Australians are constructing increasingly large houses, according to the AustralianHousingand Urban Research Institute (Ahuri).
Mini-sized blocks with electrical boxes present an opportunity to increase housing density, Ahuri’s managing director Michael Fotheringham said.
“There is no reason we can’t build smaller homes, townhouses, apartments and so on, in reasonably compact ways,” he said.
But the high cost of the vacant or shed-filled lots would prevent experiments with tiny homes, Fotheringham warned.
“It shows how much the cost of land contributes to housing unaffordability, when even such compromised blocks are attracting significant sums of money.”