Up to 30,000 units have been earmarked for eight Sydney precincts under a state government initiative to boost housing and employment.
The initial precincts identified in the Urban Activation Precincts Program include Epping Town Centre, Randwick, Wentworth Point, Mascot Station, North Ryde Station, along with areas of Macquarie Park, Homebush, and the region between Anzac Parade from Maroubra to Phillip Bay.
Planning and infrastructure minister Brad Hazzard said the precincts are in ideal locations with good access to infrastructure and jobs.
“They are areas that can be renewed to provide additional housing and employment alongside new shops, cafes and parks,” Mr Hazzard said.
“The rezoning of areas for appropriate commercial uses will also potentially create tens of thousands of new jobs, close to where people live.”
According to the Epping Civic Trust, the rezoning of the Epping town centre will allow high-rise residential buildings up to 22-storeys in the CBD, with potentially more than 4,000 additional dwellings built in the precinct.
Select councils will also receive money from a $50 million fund to upgrade infrastructure to support the population growth over the next two decades.
Hotspotting.com.au’s Terry Ryder told Smart Property Investment that while the program has the potential to generate an oversupply if it travels down the same path as Melbourne, it could also be a positive for Sydney’s market.
“In a city like Sydney, where there is a need for more dwellings and not a lot of land available unless you go way out, apartments is an answer to the problem,” Mr Ryder said, adding there is also a national trend of more people opting to live in units.
“Hopefully the market will regulate itself, and overtime it will be developed in keeping with market demand.”
However, wHeregroup’s Todd Hunter told Smart Property Investment that there is already an oversupply issue in Sydney's inner city units sector, and that the plan could have negative consequences, similiar to what is happening in Melbourne.
“You’ve got to look at Melbourne, [and] see what’s happening in Docklands. There is a massive oversupply, and property prices have dropped,” Mr Hunter said.
“You can almost see tumbleweed going down the road - it’s that bad. You can’t rent them, and there are thousands for rent, thousands for sale.”
With a large supply of units available for rent in Sydney, Mr Hunter questioned the need for more supply.
“[Is] capital growth going to come out of it? It’s not going to happen,” he said.
“Until they get that supply down, there’s not going to be rental increases. You’re going find that a lot of those units will be dropping their rents to get filled.”
However, more sub-cities coming off Sydney, like Parramatta, he said, could be a solution.