Sydney’s eastern suburbs are emerging as one of the most compelling development markets in the country, as planning reform, stabilising conditions and an undersupply of new housing bring developers and investors back to premium sites.
After several years in which high construction costs, rising interest rates and lengthy approval processes made development increasingly difficult, Cushman & Wakefield property experts say the balance is beginning to shift.
Government-led planning initiatives, including state development pathways and new master plans, are providing developers with greater clarity around what can be built and where, reducing one of the biggest uncertainties traditionally associated with acquiring development land.
Cushman & Wakefield National Director, Investment Sales NSW, Miron Solomons said the changes were creating a clearer roadmap for groups prepared to take a longer-term view.
“There has arguably never been a better time in this cycle to be looking at premium development opportunities in Sydney’s eastern suburbs.
“The planning environment is becoming clearer, market conditions are stabilising and sophisticated developers are looking beyond today to where the supply-demand equation will sit in 12, 24 or 36 months.
“In development, the groups that can hold the longest are often the ones that ultimately do the best. Buyers who have access to capital today have an opportunity to secure sites and build their pipeline before competition intensifies further” he said.
The eastern suburbs remain chronically undersupplied with new housing, while tightly held land, established neighbourhoods and high barriers to entry have historically limited opportunities for developers to deliver projects at scale.
While traditional council approval pathways have long been viewed as a hurdle, greater state government involvement in housing delivery and planning is beginning to provide alternative pathways and greater certainty for qualifying projects.
The shift is particularly significant in the eastern suburbs, where experienced developers tend to focus closely on individual neighbourhoods and have a deep understanding of local buyers, pricing and the type of product those markets can absorb.
Cushman & Wakefield National Director, Investment Sales NSW, Matt Pontey said capital was becoming more active, although buyers remained highly selective about where they were prepared to deploy it.
“Capital is available to the right groups and we are seeing interest in premium sites increase because these locations are increasingly being viewed as safe havens for development capital.
“Developers want to understand what they are buying, what the end market looks like and where their competitive advantage sits. In the eastern suburbs, they can physically see the depth of established housing, amenity, infrastructure and buyer demand around them.”
That represents a change from previous property cycles, when an overheated Sydney market encouraged investors and developers to pursue opportunities in alternative markets such as Wollongong, Newcastle and Melbourne.
Mr Pontey said stabilising conditions were now encouraging some capital to return to familiar core markets.
“When Sydney became too expensive in previous cycles, capital naturally looked elsewhere for returns. What we're seeing now is a renewed willingness to come back to markets that investors know intimately and assets they can touch, feel and actively manage,” he said.
“That doesn't mean buyers are indiscriminate. If anything, they are more selective. But when a premium site comes to market with a credible planning pathway and strong underlying residential fundamentals, there is a growing pool of capital prepared to compete for it.”
Mr Solomons said the current environment was creating a window for developers capable of looking through shorter-term uncertainty.
“The real opportunity is not necessarily what conditions look like today; it's what the market could look like when a project is ready to deliver.
“With limited new supply, clearer planning pathways and an established premium buyer base, the groups securing quality sites now are positioning themselves for the next phase of the cycle.”
