New Rezoning Changes for Sydney: Is this a Game Changer?

As experienced buyers’ agents in Sydney’s property market, we at Buyer’s Domain have been closely monitoring the recent rezoning changes announced by the NSW Government. These sweeping reforms are set to reshape the landscape of housing development across Sydney and beyond, potentially altering the dynamics of the property market for years to come. In this comprehensive analysis, we will explore the implications of these changes for property buyers and investors, and how they might impact the Sydney property market.

Understanding the New Rezoning Policy

The Minns Government has introduced a significant policy shift aimed at addressing the housing shortage and affordability crisis in New South Wales. This new Low and Mid-Rise Housing Policy is designed to encourage the development of a diverse range of housing options within proximity to key urban centres and transport hubs.

Key Points of the Policy:

1. Scope: The policy affects 171 suburbs across Sydney, the Central Coast, Illawarra-Shoalhaven, and Hunter regions.
2. Target: The government aims to deliver 112,000 new homes over the next five years.
3. Zoning Changes: The policy overrides existing council restrictions, allowing for:
   – Terraces, townhouses, and low-rise residential flats in R1 and R2 zones
   – Medium-rise apartments in R3 and R4 zones
4. Proximity: These changes apply to areas within 800 metres or a 10-minute walk from town centres and stations.
5. Building Heights: The policy permits:
   – Up to six-storey apartment blocks within 400 metres of the designated centres
   – Up to four-storey developments between 400 and 800 metres from these hubs

Impact on the Sydney Property Market

As buyers’ agents, we anticipate that these rezoning changes will have far-reaching affects on the Sydney property market. Here are some key considerations for property buyers:

1. Increased Housing Supply
   The primary goal of this policy is to boost housing supply, with the NSW Government targeting 377,000 new homes by 2029. This increase in supply could potentially ease pressure on housing prices and improve affordability, especially for townhouses and low rise apartments in areas that have traditionally resisted higher-density development.
2. Changing Neighbourhood Characteristics
   For property buyers, it is crucial to understand that the character of many suburbs, particularly in areas like Sydney’s North Shore and Northern Beaches, may undergo significant transformation. Areas that were previously dominated by detached houses may soon see an influx of townhouses and low-rise apartments.
3. Investment Opportunities
   Investors should be alert to the potential for capital growth in areas affected by the rezoning. Properties that can be redeveloped under the new rules may see an increase in land value. However, it is essential to conduct thorough due diligence, as not all properties within the designated areas will be suitable for redevelopment and there will be criteria concerning matters such as minimum lot sizes for example.
4. First-Home Buyer Prospects
   The increase in medium-density housing options could create new opportunities for first-home buyers to enter the market in desirable locations that were previously out of reach due to the predominance of expensive detached homes.

Geographical Focus of the Changes

The rezoning policy has a particular focus on certain areas of Sydney, which property buyers should be aware of:

• Inner West: 17 centres, including Annandale, Ashfield, Burwood, Concord West, Croydon, Drummoyne, Dulwich Hill, Erskineville, Five Dock, Leichhardt, Lilyfield, Marrickville, Newtown, North Strathfield, Petersham, St Peters and Stanmore.
• North Shore: 34 centres, including areas in Hornsby, Ku-ring-gai, North Sydney, Ryde, Willoughby, Lane Cove, Hunters Hill, and Mosman.
• Northern Beaches: Nine centres, including Balgowlah, Dee Why, Forestville, Manly, Manly Vale, Mona Vale, and Warringah Mall.
• Hills District: Seven centres, including Baulkham Hills, Castle Hill, and Kellyville.
• Eastern Suburbs: Three centres – Double Bay, Edgecliff, and Rose Bay.
• Central Sydney: Seven centres, including Surry Hills and Oxford Street.

Community Response

The rezoning changes have sparked intense debate among Upper North Shore residents. Many long-time residents express concerns about the potential loss of the area’s unique character and increased pressure on local infrastructure. However, there is also a growing recognition of the need for more affordable housing options, particularly for younger families and downsizers wishing to remain in the area.

Property Value Fluctuations

As buyers’ agents, we have noticed interesting trends in property values across the Upper North Shore. While some areas have seen increases in land values due to development potential, others have experienced temporary dips as the market adjusts to the new reality. For instance, properties within 400 metres of train stations have seen an average increase of 12% in value over the past year, reflecting their newfound development potential.

Potential Challenges and Considerations

While the rezoning changes present numerous opportunities, there are also potential challenges that property buyers should consider:

1. Infrastructure Pressure
   The increase in population density will put additional strain on existing infrastructure, including roads, public transport, schools, and healthcare facilities. Buyers should assess the current state of infrastructure in target areas and any planned improvements.
2. Council Approval Processes
   Although the policy overrides certain council restrictions, local councils will still retain control over development approvals. They will assess factors such as parking, light access, and minimum frontages. This means that not all properties within the rezoned areas will automatically be suitable for redevelopment.
3. Market Adaptation
   The property market may take time to fully adjust to these changes. In the short term, we may see a period of uncertainty as developers, homeowners, and investors navigate the new landscape.
4. Community Resistance
   Some communities, particularly in areas that have historically favoured low-density housing, may resist these changes. This could lead to localised conflicts and potentially impact the desirability of certain neighbourhoods.

Strategies for Property Buyers

In light of these significant changes, we at Buyer’s Domain recommend the following strategies for property buyers:

1. Research Thoroughly: Identify which areas are affected by the rezoning and how this might impact property values and neighbourhood characteristics.
2. Consider Future Development Potential: When assessing properties, consider not just their current state but their potential for future development under the new rules.
3. Assess Infrastructure: Investigate current and planned infrastructure improvements in areas of interest, as these will be crucial to supporting increased population density.
4. Engage Professional Help: The complexity of these changes underscores the value of working with professionals such as experienced buyers’ agents who understand the nuances of the Sydney property market.
5. Think Long-Term: Consider how these changes might affect the area over the next 5-10 years, not just in the immediate future.
6. Stay Informed: Keep abreast of any further policy changes or adjustments, as the implementation of these reforms may evolve over time.
7. Consider Local Council Interpretations: Stay informed about how local councils are interpreting and implementing the rezoning policy.
8. Engage with Local Communities: Understand grassroots perspectives on development by engaging with local community groups.

Conclusion: A Transformative Moment for Sydney’s Property Market

The new rezoning changes represent a significant shift in Sydney’s approach to urban development and housing supply. While they present challenges, they also offer substantial opportunities for property buyers who are well-informed and strategically positioned.

As buyers’ agents, we believe that these changes have the potential to be a game-changer for the Sydney property market. They may lead to a more diverse housing stock, improved affordability, and new investment opportunities. However, the full impact of these changes will only become clear over time as the market adapts and developments begin to take shape.

At Buyer’s Domain buyers’ agents, we are committed to helping our clients navigate these changes and make informed decisions in this evolving landscape. Whether you are a first-home buyer, an investor, or looking to upgrade, understanding the implications of these rezoning changes will be crucial to your success in the Sydney property market.

For personalised advice on how these changes might affect your property buying decisions, we invite you to contact our team of experienced buyers’ agents at Buyer’s Domain. We are here to help you make the most of the opportunities presented by this transformative moment in Sydney’s property market.