Sydney property developers are buying blocks of units, knocking them down and replacing them with fewer luxury apartments or homes, a trend that is reducing dwelling numbers amid a statewide housing crisis.
Numerous developments across inner Sydney and the eastern suburbs have been approved, with more in the planning stage. In most cases interwar low-rise apartment buildings will be demolished to make way for “ultra-luxurious” homes for many fewer residents.
Several councils have passed motions supporting “no net dwelling loss” provisions in a bid to stop developers targeting what are often the only remaining affordable homes to buy or rent in some of Sydney’s most exclusive pockets.
In Bellevue Hill, one of the most expensive suburbs in Sydney, the handful of older unit blocks are often the only accessible homes for singles, local frontline workers and those on low incomes.
On Streatfield Road, above Cooper Park, a two-storey building from 1928 that is home to eight small apartments is set to be demolished, after the Woollahra local planning panel last month approved a controversial development application. The panel assesses certain development applications independently of the council, but subject to its planning strategy.
The new development comprises three units, with a swimming pool and underground parking.
The footprint of the new project has also been the subject of objections. Its size on the lot will be larger, to the point it is non-compliant with the council’s minimum lot size by more than 20%.
Pem Dechen has lived in a one-bedroom unit in the building with her husband since 2010.
“It’s a great place, we’ve got a park across the road, it’s near the beach and there’s a great sense of community,” Dechen said.
The rent was just $400 a week when they moved in, and Dechen and her husband enjoy short commutes to their jobs in Darlinghurst and Woollahra.
They now face a tough search for a new home in the area. While the owner has no immediate plans for demolition, rents are rising in the area. Dechen now pays $530, but more renovated units are fetching closer to $700.
Comparable units elsewhere in the area are on the market for at least $750 a week.
“There’s just not that many one-bedroom apartments available,” Dechen said.
Dechen holds no grudge against the owner seeking to develop the plot, who she says has been a fair landlord. But she is concerned at the disappearing stock of affordable housing.
“Sooner or later there’s only going to be luxury homes in this area,” she said. “You can’t have a suburb where only rich people live, it can’t function without a mix.”
Woollahra councillor Lucinda Regan opposed the development and has been alarmed by the “definite trend”.
“This proposal is contradictory to calls for affordability,” she said. “It’s a nuanced trend that I don’t think anyone has paid attention to. People think DAs moving through quickly is a good thing for the housing crisis.
“I’m not saying you can’t develop luxury apartments, but don’t take away affordable housing.”
The council said in a statement it was “not aware of a trend in demolishing low/medium density units for fewer homes within the Woollahra LGA [local government area]”.
It said the breach of the minimum lot size at Streatfield Road was considered acceptable “as it successfully met objectives underlying the standard”.
The developer has been contacted for comment. Guardian Australia does not suggest any wrongdoing on their part.
In neighbouring City of Sydney, locals have raised similar concerns at a proposal to demolish two adjacent interwar three-storey buildings with 20 units in Wylde Street, Potts Point.
They would be replaced by a six-storey building with five three-bedroom homes, a rooftop swimming pool and seven levels underground, including for parking.
The developer, Knox, says on its website the project “is expected to set record-breaking sales for each apartment”.
“Transforming the site from 20 studio apartments to 5 ultra-luxurious residences set over 5 floors, each grand residence will enjoy direct lift access and mind-blowing, uncompromised views whilst being close to everything Potts Point has to offer,” the website says.
Knox did not respond to a request for comment.
‘Developers are lining up to cash in’
Last month Woollahra councillors passed a motion that local planning objectives be updated so that developments should result in “no net loss of dwellings”.
Neighbouring Waverley council, where the trend is more pronounced, has now amended its planning guides along the same lines.
On Fletcher Street in Tamarama, the council previously approved four units for demolition to make way for one luxury dwelling with “views across the rugged coastline to Clovelly and beyond to the ocean horizon”, according to a recent real estate listing.
The block was recently sold, after an advertising campaign that highlighted its “DA approved plans … for a luxury family home over three levels with 5 bedrooms, 4.5 bathrooms and rear lane basement garaging for 2 vehicles”.
“Truly incredible development opportunity,” the listing read.
Another proposal, to demolish 23 units at 122-128 Hewlett Street in Bronte and replace them with nine luxury dwellings, is now before the land and environment court.
The mayor of Waverley, Paula Massellos, said the eastern suburbs were losing about 30 dwellings a year as a result of similar developments.
“What’s left of our affordable housing stock comprised of older, smaller units is being snapped up by developers and is being replaced with large luxury apartments or houses that do not cater to the diverse housing needs of our community,” she said.
“There is also a trend where units are being consolidated into one dwelling, which is also significantly impacting our affordable housing stock.
“Space is scarce, so when older apartment blocks enter the market, developers are lining up to cash in.”
The council recently passed a new objective as part of its development plan to prevent developers reducing dwelling numbers.
The mayor is calling on the state government to help the council, and others like it, build and maintain affordable housing.
“We’re looking for a full package of solutions – certainly more than developers alone can provide,” Massellos said.
The premier, Chris Minns, said this week: “We’re not going to deal with the housing crisis in NSW unless we get more construction going, more completions done, and part of that means that you have to have at times difficult conversations with communities about more density.”
