New NSW parking laws worry developers

New NSW parking laws worry developers

22 February 2019

Government changes to parking laws for boarding houses in Sydney’s low-density residential areas are driving demand for properties with development approval already in place, according to one commercial property agency.

Savills Australia is witnessing an influx of property owners looking to offload their assets and capitalise on the market in response to market uncertainty surrounding the new legislation, which will limit boarding houses to a maximum of 12 rooms per site and 0.5 car spaces per boarding room.

Associate director for the Metropolitan & Regional Sales team, Nick Tuxworth, said he expected to see a spike in prices for properties that have already received development approval.

“We anticipate demand for such sites to build from developers who see them as high-yielding investments with 15-20 per cent returns and low vacancy rates,” he said.

The Metropolitan & Regional Sales team recently sold a Jesmond site for $1.175million, which had DA approval for 40 rooms, to a Sydney developer looking for “something more affordable in rural NSW”.

Now the team anticipates strong contest for a new Ashfield listing with development approval for 38 rooms.

“This market has been regulated by the government in the past 12 months, which has caught many developers out, and has forced changes in their DAs,” director Nick Lower said.

“We are finding several owners wanting to offload their sites due to these regulations so it’s a good time to be selling, as there is huge demand for approved sites with future uncertainty.”

Mr Tuxworth said “the tough rules exist to ensure boarding houses are only approved where they are close to public transport and adequate additional parking, and are compatible with council rules on density and building height”.

“The reason for the 12-boarding-room limit on boarding house developments in the R2 Zone is to address community concerns about amenity impacts, such as overlooking, overshadowing, and the loss of on-street car parking,” he said.