‘Missed opportunity’: Sale of 48 state-owned sites leads to just five DAs

Only a handful of sites sold by the state government in its divestment endeavours over the past year are the subject of development applications, raising the spectre of land banking by developers and private buyers, and calling into question the effectiveness of NSW Labor’s land audit.

Forty-eight sites, including lots in Seaforth, Frenchs Forest, Arncliffe and Stanmore, have been divested by the Labor government since April 2025, netting more than $90 million in revenue.

The sites, more than half of which are vacant land, were identified as “surplus” land – unused or underutilised – by departments and agencies through the government’s property framework.

However, an analysis of property records by the Herald has identified only five development applications lodged on these sites. Nine of the 48 properties were sold over a year ago, while nearly half have been sold since mid-June. Six were sold in the past week, too recently to have a DA lodged.

The lack of development applications has prompted questions about the effectiveness of selling public land to deliver housing, and whether the government’s policy settings have undermined the capacity of Landcom and Homes NSW to deliver affordable, public and social homes.

University of Sydney professor Laurence Troy decried the sale of public land to private buyers as nonsensical given the development could have been undertaken by Landcom, the state developer.

“Why are they selling off to the private sector? It’s a completely missed opportunity,” Troy said.

While the original intent of the land audit policy, announced in 2023, was for 30 per cent of the homes to be affordable, Premier Chris Minns redefined the proposal after announcing a $6.6 billion investment in public and social housing in 2024, instead committing to delivering 30,000 homes.

While the government claimed 21,000 “affordable and market” dwellings would be delivered from sites identified by the audit, there is no longer a requirement for developments to have an affordable housing component. Nor do sites sold at public auction need to have a development application submitted within a defined period.

Sites considered suitable for housing are offered first to state developers Homes NSW and Landcom, before being sold on the private market.

Seven properties identified by the audit were acquired by Homes NSW or Landcom. A further 15 were “earmarked for transfer” to the state developers through the audit and were undergoing assessment, representing “the majority of homes” identified through the land audit.

However, sites earmarked for transfer are rarely being taken up by state developers. In August, the government told The Guardian that about 18 of the 55 land audit sites “identified have been transferred to or are currently undergoing due diligence by Homes NSW or Landcom”.

Only two more sites were acquired by Landcom in the intervening eight months.

Landcom declined to proceed with a number of land audit sites because the number of homes that could be delivered was too small, said chief executive Alexander Wendler.

“The largest number of sites where we say no is because of size,” he said.

The state developer has acquired four land audit properties, and was looking for projects with the potential to build hundreds or thousands of dwellings, Wendler said.

Twenty low-density residential properties identified as being suitable for housing have been sold in public auctions. Another five high-yield sites owned by the state government are subject to an expressions-of-interest process.

This includes vacant land in St Leonards adjacent to Royal North Shore Hospital. The site is “perfectly positioned to provide high-quality housing and key worker housing in a high-amenity area and with excellent public transport connections”, said Property and Development NSW, the agency leading the audit.

Landcom and Homes NSW turned down the site before it was opened to private buyers last May. It is now under offer.

A lot on Cardigan Street in Stanmore, formerly held by Transport for NSW, was snapped up for $5.8 million by Clarence Street Properties, a company owned by restaurateurs Basil and Liane Kalkanas.

In Seaforth, seven adjoining lots with ocean views were sold at public auction for between $2.15 million and $2.6 million across April and August last year. A $2.7 million development application submitted by MD Living for one property includes a five-bedroom residence and construction of a swimming pool.

Sites sold by private treaty are contractually required to submit a development application “usually within nine months” and have achieved “substantial commencement” within two years. Only two sites on the Property and Development list were acquired by private treaty.

A spokesman for the NSW government said it had made the “largest investment” in social and affordable housing in the state’s history, while pointing to 3500 homes delivered by Homes NSW in this term of government.

“The land audit has so far announced sites capable of delivering approximately 11,400 homes, this includes 1500 homes in Chatswood, more than 2000 in Rydalmere and 500 in North Eveleigh,” he said.

“Through the land audit we are identifying sites that have no current or potential future use for government and unlocking these sites for the delivery of housing.”

Greens housing spokeswoman Jenny Leong said the land audit had flipped from a way of building more public housing, instead becoming “a highly efficient system for finding public land to sell for a quick buck”.

“Make no mistake: this is shameless privatisation, made all the more grotesque because it’s happening under the guise of addressing the housing crisis,” she said.

“If they’re as desperate to solve the housing crisis as they claim to be, why aren’t they building houses on the ample vacant land or housing people in the many existing homes they already own?”

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