Link to the article online: New Kogarah City rezoning plan sparks flood of buy-up deals for ‘glut’ of apartments
New Kogarah City rezoning plan sparks flood of buy-up deals for ‘glut’ of apartments
By Maria Galinovic, August 11, 2015
An aerial shot of Kogarah CBD, taken about 10 years ago. Picture: Robert Pearce
KOGARAH, in the grip of frenzied real estate wheeling and dealing, could be in for a shock if the New City plan is approved in its present form.Developer Michael Anagnostou predicts a glut of apartments, falls in prices and ordinary homeowners now hoping to make a killing having to settle for less.
And Kogarah Council would be hit with an unmanageable number of development applications (DAs) as growth designed to take place across 15 years happens all at once. (Some residents have also expressed fears about lifestyle and overshadowing of buildings – see breakout below)
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The rezoning of parts of Kogarah to higher densities has caused a frenzy among developers, real estate agents and homeowners attempting to maximise yields in the areas which are listed for rezoning.
Homeowners are teaming up to sell their properties in lots suitable for five- to 11-storey apartment blocks; and real estate agents are offering big money while hoping to reap huge benefits when they on-sell to builders and developers.
Just about everybody is being visited, phoned or letterboxed by someone offering a ‘‘deal’’.
Mr Anagnostou says his company has had between 15 and 20 offers of sites ready for development once the local environmental plan (LEP) amendment was approved — and that is just a fraction of what was available. If his company took up those offers about 2000 new apartments would be added to the Kogarah area.
‘‘There is an overabundance of development sites offered to developers at inflated prices,’’ Mr Anagnostou said.
‘‘Some sites are already having difficulty selling.
‘‘While it is still a great market for selling properties — an astute developer would get to work immediately — our concern is that there will be a glut and prices will fall.’’
Mr Anagnostou expects a possible price drop of at least 15 per cent. He also predicts that traffic ‘‘will go nuts’’ as Kogarah becomes a building site, particularly in suburbs such as Blakehurst, Sans Souci and South Hurstville, which don’t have the necessary infrastructure.
‘‘The LEP rezoning is too widespread — it covers the whole local government area — they should have stuck to the town centre and left the suburbs alone,’’ Mr Anagnostou said.
As a developer he said he was unlikely to buy a site from a real estate agent.
‘‘We prefer to put our own sites together — why pay someone a million just for knocking on a door?’’ he said.
Mr Anagnostou’s view is largely supported by Argy Property principal agent Walter Glaser who has been observing the local market for a long time.
Mr Glaser said he had never seen such activity in the market with so many players, including agents from the city and many other suburbs.
He said property owners claimed they were being visited at least 17 times by agents and developers hoping to sign them up to a deal.
‘‘Just about everything is under option — people have been promised a lot; there is a lot of bullshit, misinformation, overpromising and some deceptive conduct,’’ he said.
‘‘Everyone is throwing option fees around.’’
Mr Glaser said he believed the market was slowing and there were a huge number of units in the pipeline.
‘‘If they all come on the market at the same time prices will drop,’’ he said.
‘‘It will be insane.’’
But homeowners in rezoned areas would still be winners. If they had been promised $3 million for their $1 million property they might have to settle for $2 million.
Lower prices would obviously be a bonus for first home-buyers and investors.
Future imperfect: Jan and John Totterdell say Kogarah’s New City Plan will ruin their quiet suburban street. Picture: Jane Dyson
SINCE Kogarah Council unveiled its New City Plan — an LEP amendment designed to cater to future housing needs — neighbours don’t talk to each other any more in Wyuna Street, Beverley Park.
Friendships developed over four or five decades have fallen into a heap, destroyed by fears that proposed rezonings will permanently destroy a way of life.
And, inundated by offers from developers and real estate agents keen to capitalise on the development sites sure to open up once the plan is finalised, they accuse each other of ‘‘selling out’’ for high prices.
Such scenes are playing out all over Kogarah. Parallel to the Princes Highway, Wyuna Street — and other streets in the same position — has been chopped in half, with the side backing on to highway properties to be rezoned for five to seven storeys, while the other half will keep its original suburban zoning.
Jan and John Totterdell, on the ‘‘suburban’’ side, fear that their home and garden will be overshadowed by seven-storey apartment developments and that the traffic will become unbearable.
No one wants to sell, they say; but no one wants to be swamped by high-rises either.
‘‘We have nothing against units in the right place,’’ Mrs Totterdell said.
‘‘But we live in a residential area we have worked hard for — I have a gorgeous 50-year-old garden.
‘‘What will happen with the overshadowing? And what’s to stop developers going from seven storeys to 13? We feel we are being driven out of our homes.’’
Rumours are rife that people on the other side of the street have optioned their homes to real estate agents for up to $2.5 million.
‘‘This is turning neighbour against neighbour and friend against friend — this will affect the rest of our lives,’’ Mrs Totterdell said.
As members of the United Kogarah City Residents Association — which wants the plan returned to the drawing board for greater community consultation — the Totterdells are opposing the rezoning, or at least fighting to keep it down to three storeys. They have been circulating a petition.
On the other side of Wyuna Street, a long-term resident who does not want his name used so as not to exacerbate the animosity in the street, refuses to sign the anti-zoning petition on purely pragmatic grounds.
Although sympathetic to neighbours across the road, this resident said the rezoning was a done deal, at least on the Princes Highway, where seven-storey developments were a ‘‘certainty’’.
As the houses on his side of the street backed on to potential Princes Highway development sites, they were facing the prospect of seven-storey blocks more or less in their backyards.
‘‘In our situation we are not going to fight it,’’ he said.
‘‘We are resigned to the fact that the Princes Highway will be rezoned and I don’t want high-rise backing on to my property.
‘‘I don’t want to move, but we lose if we don’t.’’
This resident said he knew of two people who had accepted options on their properties although no definite sums were mentioned.
Some offered a per square metre figure, and he had heard $2.3 million bandied about — ‘‘but no figures have been guaranteed’’.
This resident said he would accept $2.3 million today but was not prepared to wait out a year that most option agreements demanded.
Instead, he is preparing to deal directly with a developer when and if the time comes.
GOT A SPARE $25M?
– A 2879-square-metre development site with three street frontages comprising parts of Gladstone Street, Victoria Street and Regent Street at Kogarah has a price guide of more than $25 million. It could be home to 111 units over 11 levels.
All of the homes listed for sale are in excellent condition and can be rented out while a DA is obtained from the council; some of the vendors will consider a leaseback period.
– A 1,345.7m2 site on Palmerston Street and Regent Street is marked for 65 apartments over 11 levels comes with a selling price of $13.5 million.
– An area of 1,658m2 at 70-74 Regent Street is marked for 76 apartments over 11 levels and comes with a price tag of $15.9 million.
Do you have concerns about the Kogarah City Plan or do you think it’s the way forward?