St Marys leads the charge to fill the 'missing middle' as quarter-acre blocks redeveloped into townhouses

Sydney’s outer suburban real estate has long been characterised by free-standing houses with large backyards. But in the small suburb of St Marys, 45 kilometres west of the CBD in the Penrith area, this is changing.

St Marys home owners are increasingly selling as teams of two, rather than on their own. Experts say this shift is due to demand from first home buyers for townhouses. Developers seeking to satisfy this demand will often pay hundreds of thousands of dollars more to secure large blocks where they can build this home type.

Raine & Horne St Marys sales agent Peter Diamantidis has sold about 15 dual blocks in St Marys and the surrounding suburbs over the past 18 months, as well as 50 to 60 stand-alone lots with townhouse development potential, or R3 zoned.

“There’s high demand for townhouses in this area … people don’t want big backyards any more and it’s ideal for first home buyers,” Mr Diamantidis said.

Some first home buyers he has seen in the area are coming from locations closer to the CBD, such as Strathfield, looking to buy a new home under the $600,000 threshold to obtain the grant and full stamp duty concession.

The median price for a house in St Marys is $582,500, according to Domain Group data, and is one of just 17 suburbs with a median under the threshold.

This new demand has become lucrative for St Marys home owners.

“When selling with a neighbour, these blocks can go for an additional $200,000, or $100,000 each,” he said. That’s on top of the developable value for an individual free-standing home on a block.

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Much of the spate of homes selling as a duo has been spurred on by a rezoning of land in St Marys in 2015, concentrating on the eastern side of the town centre.



One such block taking advantage of the shift is 165 and 167 Glossop Street, two government-owned houses on a 1200 square metre parcel marketed for $1.15 million as a “great development opportunity”.

And down the road, two houses on 2400 square metres total – 98 and 100 – are also up for sale, for $2.15 to $2.25 million.

Local agent Sid Elias, of Ray White Colyton, St Marys and St Clair, said an R3 block meant a better return on investment and was changing St Marys “to its core”.

“Owners are trying to cash in and are now educated that if owners come together and provide a development opportunity with the chances of a better price are much higher,” Mr Elias said.

There was an increasing requirement for different types of homes, including smaller houses and apartments for younger residents and older downsizers, a Penrith Council spokesman said.

This is one example of an outer suburb filling up the ‘‘missing middle” space between houses and apartments, to cater to different buyer needs.

“Inner-city living will play a vital role in meeting our housing needs and help to create a night-time economy with vibrancy, more entertainment,  cafes and activities,” the spokesman said.

Queen Street in St Marys is nearing the completion of its development into a retail street.  

“St Marys is an important hub with council advocating for a north-south rail link connecting the emerging north-west and south-west growth centres by rail, via the Western Sydney airport.

“It would see a real transformation in outer Western Sydney, delivering higher housing and employment density and improved amenity,” the spokesman said.

Development approvals received by council for townhouse developments peaked in 2015-16 with 28, and in the past four years there have been 81 approvals.

It is likely even more change will be seen in the future. University of Sydney demographer Alison Taylor explained that the west and south-west suburbs was responsible for 44 per cent of Sydney’s population growth in the past year, or 41,000 additional people.

“Future population growth is projected to intensify in the west and south-west of Sydney,” Ms Taylor said.