5 December 2011 – Research by Urbis’ Melbourne valuations team has quantified the value of rezoning land from rural to residential in the City of Wyndham in the outer south western area of Melbourne.
The study of properties of between five and 15 hectares showed the following cash value of land when it re-zoned to residential from rural.
- Land outside but near urban growth boundary $50 000 – $100 000 per hectare
- Rezoned urban growth zone away from existing development:$250 000 –$400 000
- Rezoned urban growth zone next to existing development: $60 000 hectare
Urbis associate director Andrew Kinnaird said the sales of land included within the urban growth boundary were included as part of the review. They were in areas that developers are speculating will eventually be available for residential development.
Writing in the company newsletter Urbis Insights Mr Kinnaird said the research emphasises that both the rezoning of land and the expected lead time for development have a large impact on value. The time component is made up of a combination of planning lead-in, provisions of services and risk, he said.
Mr Kinnaird said that while the value ranges of land will differ from location to location, the amount of value increase will broadly hold true.
The added value of existing improvements was an important factor for the sales of properties outside the urban growth boundary, whereas this was not normally the case for land included with the boundary, he said.