A huge surge in the number of home owners clubbing together to sell their homes to create combined sites for unit blocks and cash in as developers seek potential spots for new apartments.

And, according to a report in the Australian Financial Review, that has prompted warnings that it could lead to an oversupply of large building sites.

And some home owners only now uniting to sell their amalgamated land for development may have missed the boat

Quoting data compiled by Cotality, a property research service used by banks and lenders, the AFR says 208 groups have sold 519 properties in this way in 2023 and 2024, totalling sales of about $1.7 billion.

Some real estate agents now warning that only the sites with the optimum potential will be sold to developers. Peter Vines, the managing director at Ray White Western Sydney, told the AFR that the market would not be able to accommodate an influx of larger sites.

“There’s certainly going to be an oversupply of sites” he says. “There’s too much for developers to look at, and there’s not as many developers as people might think.”

CBRE metropolitan investments director Toby Silk says developers will be able to cherry-pick the areas of Sydney with higher apartment values and others will miss out.

“Developers are trying to find the sites that have water views, or something, which will be able to create its own niche market and compete against other suppliers,” he says.

But NSW Planning Minister Paul Scully does not believe there is any sort of oversupply.

“We’re pleased to see the market respond to the removal of restrictive planning rules,” Mr Scully says. “Just like Rome wasn’t built in a day, 112,000 new homes won’t pop up overnight.”