Is this the dream for first home buyers? A $500,000 townhouse 50km from the CBD

Hot on the heels of unveiling land for 35,000 new homes 80 kilometres south west of Sydney on Tuesday, NSW Planning Minister Rob Stokes will on Thursday broke ground at a new housing development 30 kilometres closer to the CBD.

Developer Stockland’s Willowdale project in the heart of the South West Growth Centre, less than 1.5 kilometres from the new Leppington Train Station has already proven a hit with first home buyers –  40 per cent of the 1000 residential lots have been sold to first-timers since the development’s launch in August 2013.

This latest stage of the $1.2 billion project on the 350-hectare site will include 200 two-bedroom, two-bathroom townhouses priced at about $500,000 on a 127 square metre lot.

Mr Stokes said the development exemplified the “timeless appeal of terrace housing” and Stockland senior development manager Jonathan Lawson said 73 would be built this year.

“We’re expecting our new townhouses to be very popular with first home buyers, because we’re making it affordable to buy,” Mr Lawson said.

A shopping centre and community centre are planned, with Carnes Shopping Centre five minutes away.

Meanwhile, criticism is growing of the government’s plan to build a new suburb of affordable housing near Campbelltown, with experts saying it wouldn’t alleviate the struggles of first home buyers.

In fact, it’s the inner city that should be made a focus, not the distant suburbs of Menangle Park, Mount Gilead and Wilton, said Western Sydney University urban studies lecturer Dallas Rogers.

“I’m not exactly sure who they’re targeting with this release, but it’s certainly not the group that has been hit hardest in terms of housing affordability in Sydney [first home buyers],” he said.

“Building satellite housing on the end of the city, without high speed transport connections, will not address the needs of many people that are currently feeling the effects increasing property prices and rents in Sydney,” Dr Rogers said.

Domain Group senior economist Andrew Wilson said Sydneysiders had traditionally not been put off from moving significant distances from the CBD to afford a home but had doubts this type of property would attract first home buyers.

“The perception that we’re providing a pipeline for first time home owners isn’t really what we’re seeing in these new estates,” he said.

Instead, existing home owners would be more likely to upgrade or downsize into one of these areas.

“Prices for vacant land are quite high – when buyers pay $400,000 to $500,000 for a block of land, you won’t get much change leftover from a $1 million,” he said.

For the land to be suitable for first home buyers, it would need to be priced at $250,000 for a first home buyer to then be able to complete the home for $500,000 in total.

A Department of Planning and Environment spokeswoman said there would be a range of housing options at “different price points” including homes and townhouses – though wouldn’t specify what price points these would be, suggesting it would depend on the “market”.

“Sydney’s first major land release in a decade will boost supply, putting downward pressure on house prices and helping people break into the Sydney housing market,” she said.

The towns would be expected to benefit from Campbelltown’s Regional City status, including the health and tertiary education sectors, as well as the airport at Badgerys Creek and employment in the Illawarra and Macarthur’s emerging industries.

Taj Singh, co-founder of newly-founded home ownership lobby group First Home Buyers Australia said it would be critical that the region is connected to the rest of Sydney with strong infrastructure, as well as local employment opportunities.

“The newly announced large land release in South Western Sydney goes a long way to helping first home buyers remain in Sydney, providing the lots are sold at affordable prices,” Mr Singh said.