Ph: (02) 9370 56 64

Amalgamation - a growing trend

Amalgamation - a growing trend

By Sarah Lefebvre on Dec 13 2016


The rapid expansion of our cities has amplifed the need for more dwellings and led to the densifcation of suburbs around Australia.

Super lots delivering super returns

It’s a phenomenon that always makes headlines, neighbours coming together to sell their properties, as a “super lot”, for double, triple or even quadruple the price of others in the street. The growing need for new housing has seen councils rezone residential, commercial, industrial and rural land to allow higher density development. It’s this process which has seen some home owners strike it rich.

In this report we take a look at the ins and outs of amalgamation and consider whether your property is a candidate.

What is amalgamation?

In real estate terms, an amalgamation is a situation where multiple owners come together and agree to, theoretically, combine their properties to form a single lot. The reason why owners choose to amalgamate varies; however, the most common is to market the combined properties for sale as a single lot in order to attract developers and, potentially, achieve a premium sales price.

Examples

  • Two, or more, next door neighbours who own detached houses come together to sell together.
  • Individual owners of an apartment or office building come together to offer the whole property for sale.
  • Neighbouring industrial or rural land owners decide to sell their land as a single lot.

Why do neighbours amalgamate their properties?

The rezoning of land to a “higher value” use is the key driver behind neighbours amalgamating their properties for sale.

Any individual property that gets rezoned, to a higher valued use, should in theory achieve a higher price when placed on the market for sale. However, an amalgamated rezoned property allows greater  oor area and hence more dwellings to be built on the site, making the end “fully developed” value of a property higher.

Why is amalgamation so popular now?

In order to accommodate the rising demand for homes, state and territory governments have released more land for residential use on the outskirts of capital cities and major regional centres. However, the soaring cost of providing infrastructure, to these new housing areas, has seen authorities push for increased higher-density development close to existing infrastructure.

This has, in turn, led to the rezoning of land, in middle-ring and inner-city suburbs, from single houses to medium and high density residential use.

When is it best to amalgamate and who can do it?

A suitable time to amalgamate multiple properties is once the state and local government authorities have  finalised and approved the rezoning of land on which all the amalgamated properties sit.

As long as all parties agree, anyone can amalgamate their properties. However, in order to attract strong demand from potential buyers it is best that the sites are located close to new or existing infrastructure, such as bus or train interchanges, major road networks, hospitals or major commercial precincts.

How do you start the process?

As more people move into our cities, and more suburbs are rezoned to accommodate the growing population, the opportunity for neighbours to amalgamate sites will also rise. However, not all properties or locations are suited to amalgamation. Extensive research and due diligence is needed to understand what’s best for your situation and property.

The  first step in your research process is to visit the planning department of your local council to understand:
  • What is the current zoning of your property?
  • What is the current zoning of your neighbour’s property or properties?
  • Are there any plans or potential for the future rezoning of your property?
Secondly, a chat with your neighbours is also important to understand if they are like minded and are willing to go down this path.

Thirdly, contact your local LJ Hooker real estate agent, as they will be able to advise you whether amalgamations in your area could work and if there is demand from developers in your local area.

Click here to download our Open Maket Report

You may also like

2016 Property Market Update

2016 Property Market Update

With 2016 drawing to a close, here is a quick snapshot of how our real estate markets performed
4 Reasons Now is the Best Time to Sell

4 Reasons Now is the Best Time to Sell

There are signs that this could be one of the best seasons ever for sellers. There are a number ...
The Evolution of the Rentvestor

The Evolution of the Rentvestor

Since the emergence of the Rentvestor trend in 2013 this burgeoning investment strategy has quick...

Subscribe to our newsletter

Please enter your name
Please enter your valid Email Address
Please checked I Agree to Terms & Conditions and Privacy Policy