Undeveloped & Undivided Land in Western Sydney

[Smm91]

Hi,

I've come across a project of buying a block of undivided and undeveloped land in South West Sydney. The total land area has not been rezoned yet. It'll take roughly 3-4 years for the rezoning and DA approval process. I'm pretty optimistic about the growth in that area with the proposed Airport (which has got the final confirmation), proposed M9 & M12 in the vicinity of the project. Since I'm new at this I was wondering what are the risks of committing to such projects. I could think of the following ones:

i) the rezoning process gets delayed than the expected time frame (my investment will be stuck for longer period of time)

ii) the finance - is there any loan available for the DA approved properties? (the land block won't still be under my name until the actual development happens, it'll still be under a single title of huge undeveloped land.)

Please share your thoughts of what other risks there might be in the project.

Cheers,

 

[bumblegoodie]

One major factor is uncertainty and the other is the is no tenants to pay for the portion of the loan. Therefore, u have basically land banking and not utilising your hard earn cash.

I guess from my point if view it all comes down to return on investment.

Maybe good for very long time wise but it depends on the selling price.

 

[my03]

What makes you think it will be rezoned at all? Is the land marked for rezoning under a draft LEP?

 

[ej89]

Why would they rezone the area again? It all got rezoned as part of the southwest growth centre... How much are you looking to spend on a risk like that...

 

[RetireRich101]

The planning process is
Precinct > release > rezone.
If they're not marked as a Precinct in the SWGC website, I would think there is at least 20+ years. The shortest time frame for a Release to Rezone is 2-3 years in NWGC, and that was a lot of push from the State Government with house shortage few years back.

Also watch out for land tax is you're land banking as IP.

 

[Smm91]

What makes you think it will be rezoned at all? Is the land marked for rezoning under a draft LEP?

I was under the impression the developers can apply for rezoning a land. How do you find out whether a land is marked for rezoning under a draft LEP? From the council? This site is in the South West Growth Centre precinct list, yet to be released for planning.

 

[Smm91]

The planning process is
Precinct > release > rezone.
If they're not marked as a Precinct in the SWGC website, I would think there is at least 20+ years. The shortest time frame for a Release to Rezone is 2-3 years in NWGC, and that was a lot of push from the State Government with house shortage few years back.

Also watch out for land tax is you're land banking as IP.

It's currently marked as a Precinct in SWGC website, yet to be released for planning. It says in the NSW growth centre planning website that with proper precinct planning it enables rezoning to generally take place within 2 years compared to 7-8 years previously.

http://growthcentres.planning.nsw.gov.au/PrecinctPlanning.aspx

 

[Smm91]

Why would they rezone the area again? It all got rezoned as part of the southwest growth centre... How much are you looking to spend on a risk like that...

I could be wrong, but I don't think it got rezoned as part of the SWGC. I'm looking to spend somewhere around 60K now and another 120K once the DA approval is completed for a 600 sqm block.

 

[Smm91]

Btw, does anyone here know if there's any loan available for DA approved undivided lands?

 

[my03]

It's currently marked as a Precinct in SWGC website, yet to be released for planning. It says in the NSW growth centre planning website that with proper precinct planning it enables rezoning to generally take place within 2 years compared to 7-8 years previously.

http://growthcentres.planning.nsw.gov.au/PrecinctPlanning.aspx

Ok gotcha. I actually worked for the GCC as a student 10 years ago when they were doing riverstone etc and my understanding is that although it's great that the land has been identified as a precinct, it is a very slow process which involves consultation with many stakeholders- councils, service providers, residents etc. It was more or less a masterplanning process with various proposed zonings, subdivision patterns, key hubs, transport hubs, road network and open space mapped out.

Back in those days, the rezonings would take place in a large scale after precinct master plans have been adopted, it would be unlikely that councils would consider spot rezonings or rezonings for single parcels of land while all this was happening because it could affect the bigger picture.

It depends how far along the process you are buying, if early stages it would be a very speculative punt and you could be waiting for a while.

Things might have changed since then. Call up Council and ask to have a chat with a strategic planner.

 

[ej89]

If its Riverstone or Vineyard stay away. Theres a reason people are selling these lands. They couldnt get enough votes to develop them