23-05-2025
$20 million property trend creating sea of overnight multi-millionaires: 'Can be very lucrative'
Australian homeowners are becoming far richer thanks to a wild new property trend. Instead of selling just your humble abode, neighbours are banding together to sell their block to developers for much more money.
That's what six houses on Mena Street in Sydney's North Strathfield are doing, and they could sell for a collective $20 million. Michael Murphy from McGrath Strathfield organised the deal and told Yahoo Finance home owners may not realise that recent rezoning had created new opportunities for residents to cash in on the trend.
Murphy said the North Strathfield group was "quite opened-minded" when approached.
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He revealed that a home in the area, which the agent admitted wasn't as nice as the houses in this sextet, recently sold for just under $2.2 million.
If they tried to go it alone, they could get a touch more than that, depending on buyer appetite.
However, selling as a group means each household stands to earn $3.3 area where these six homes are in has recently been rezoned as part of the NSW government's Transport Oriented Development (TOD) Program.
There are several regions across the city caught up in the program, which is designed to increase housing supply near new transport hubs.
A new metro station is set to be created in North Strathfield and rezoning the area allows for more high-density living projects to be created.
This isn't the only sale of its kind in the suburb at the moment, with another nearby lot encompassing 16 houses on three different streets.
Similar state government programs in the past have spurred this type of property trend.
NSW's Urban Activation Precinct Plan saw a group consisting of 25 homes in Sydney's Castle Hill try to sell their lot to a developer for an eye-watering $100 million in 2016.
There was another group in the same suburb in the same year that had 90 homes in the collective, in a deal worth $360 million.
Each individual homeowner for both deals were set to earn around $4 million each, which was nearly four times what the average house price of the suburb was nine years ago.
John McGrath, from McGrath Real Estate, said at the time that this "megalot" trend is a win-win for everyone.
"The great news is that separate to the actual need for more medium-to-high density living to simply fit everyone in; a lot of people actually want to live in apartments over houses these days anyway," he wrote.
"So it's a great marriage between the practical needs of growing cities and the lifestyle preferences of their residents."
Murphy told Yahoo Finance that these deals are all unique in how they're created.
Sometimes the neighbours will do the hard work themselves by convincing each other to sell as a group.
Other times, it's up to the real estate agents to see if they can get a group going, while developers have also been known to door-knock homes in an area to see if there's any appetite.
"For some homes in the area that have been newly built and may be on smaller blocks, it's not as lucrative," he said.
"But if they're on a decent land parcel with more of an original style home, then there's definitely a major uplift."
He added that 171 areas have been rezoned recently across Sydney to allow for these megalot deals to happen within 800 metres of a town centre or train station.
Murphy said if you live in one of those rezoned areas, it's worth speaking to a town planner, real estate agent, solicitor or council representative to understand how their land value might have changed as a result.
"Every owner's circumstances is different, and they obviously need to weigh up what's best for their scenario," he told Yahoo Finance.
But the agent revealed there is one small downside to selling as a group to a developer rather than just by yourself.
"Selling to a developer is generally a longer settlement period. A normal settlement periods is around that 42 day or six week mark.
"However, for an amalgamation, generally, it could be anywhere ranging from six months up to 24 months.
"Most developers will will want a longer settlement period so that they can organise funding and start to prepare their development application with a local council."
He said some deals have been done faster than that time frame, but usually it takes a lot of moving parts to align for the deal to be fully in to access your portfolio
