Sydney flirtation with duplexes blossoms into obsession

If Sydney’s real estate market were a dating app, developers would swipe right on duplex sites every time.

The city’s love affair with duplexes has evolved from a passing interest into a full-blown obsession.

Once a second thought, duplex sites have become some of the hottest properties on the market, often commanding premiums and frequently being sold off-market. Developers are even known to deliver personal “love letters” to the mailboxes of potential duplex sites, eager to secure these coveted locations.

Sydney’s growing fascination with duplexes represents a pragmatic and profitable approach to urban development.

Duplexes, featuring two units sharing a common wall but with separate amenities such as gardens and parking spaces, are a smart way to maximise land use in a city where space is at a premium.

This dual-unit configuration not only makes economic sense for developers but also provides a more affordable entry point into desirable neighbourhoods for homebuyers.

The affordability of duplexes has made them a viable option for first-time homebuyers and those looking to downsize without sacrificing the benefits of a traditional home. Many duplexes offer the same amenities as single-family homes, including private outdoor spaces, which are highly valued in suburban living.

For developers, duplexes offer an economic advantage by allowing them to maximise the use of land. Dividing a single plot into two units effectively doubles the potential profit from each development.

The popularity of duplexes is driven by developers who recognise the economic benefits of this two-for-one approach to building.

A love affair with duplexes: changing perceptions

Sydney’s south west has been transformed by this duplex craze.

The stigma once attached to living in a duplex has changed dramatically.

Duplexes are no longer seen as a lesser alternative to townhouses but are now considered comparable to freestanding homes.

Many modern duplexes feature four or five bedrooms, swimming pools, study spaces, and multiple living areas, rivalling the amenities of standalone houses.

This shift has opened the market to first home buyers, allowing them to enter the property market with high-end duplexes that offer the same quality and lifestyle as freestanding homes. The way duplexes are being designed has changed, with a focus on luxury and functionality.

Duplex sites are now highly sought after, and it’s not uncommon for developers to go to great lengths to secure them. This competitive atmosphere underscores the growing demand for duplexes and their appeal to developers and buyers.

Addressing Sydney’s housing affordability crisis

The rise of duplexes in Sydney is largely a response to the city’s ongoing housing affordability crisis. With traditional housing options becoming increasingly out of reach, duplexes offer a cost-effective alternative that still meets the needs of families looking for space and privacy.

Medium-density approvals are being driven by challenges in the detached market and severe rental shortages.

On 28 November 2023, the NSW Government announced its intention to introduce new planning rules to fast-track low and mid-rise housing. This amendment to the State Environmental Planning Policy (Housing) 2021 aims to create capacity for up to 112,000 additional homes, significantly contributing to the housing accord target of 377,000 new homes by July 2029.

The first stages of these planning changes commenced on 1 July 2024, under the State Environmental Planning Policy (Housing) Amendment (Dual Occupancies and Semi-detached Dwellings) 2024.

Managing Director Katherine Koulizakis from Gaxa Group states that, “The changes are not as significant for our developer clients as we had hoped. We had anticipated proposed reductions to the minimum sqm lot sizes and widths for duplex sites, but the new Housing SEPP provisions do not override existing minimum lot size provisions in local environmental plans.”

The initial stage permits dual occupancies and semi-detached homes in all R2 low-density residential zones across NSW under the Housing SEPP.

Although secondary dwellings were already allowed in all residential zones where dwelling houses are permitted, these changes provide further flexibility in housing options.

Ms Koulizakis also goes on to say, “As much as we want to solve the housing crisis and there is ample opportunity, understanding your planning pathway, consultant engagement requirements, layers of council levies, and stakeholder management is essential before jumping on the duplex bandwagon.”

Navigating the complexities of duplex development

While these changes represent progress, they may not be as significant for developers as initially hoped.

The anticipated reductions to minimum lot sizes and widths for duplex sites have not been realised, as the new Housing SEPP provisions do not override existing minimum lot size requirements in local environmental plans.

Understanding the planning pathway, consultant engagement requirements, council charges, and stakeholder management remains essential for anyone considering duplex development.

Key considerations during the execution of a duplex project include:

• Water/sewer services: obtaining a Section 73 compliance certificate from Sydney Water for sewer extensions or encasement works can take three to five months from design to approval.
• Council contributions: council fees and levies have increased significantly, so it is advisable to pay these fees early to secure existing rates.
• Essential services: coordination of essential services such as NBN, electricity and gas lines should begin during the demolition phase to avoid delays.
• Surveying requirements: a registered surveyor is involved throughout the build process, from initial services certificates to final deposited plans and administrative documents. Deviations from approved plans need to be addressed promptly to avoid delays.

Managing these aspects is crucial to keeping projects on track and within budget.

Delays in obtaining approvals and coordinating services can significantly impact the project’s bottom line.

For small developers, staying on top of potential delays and maintaining a clear timeline for essential services is vital. For instance, obtaining a ‘council letter’ for NBN services can take up to 10 weeks, and delaying this step can render a completed site uninhabitable and unsellable.

Future of duplex development in Sydney

The trend towards duplex living shows no signs of slowing down.

With more councils and homeowners recognising the benefits of this housing type, duplexes are set to play a crucial role in Sydney's urban development strategy.

Rather than pushing people further out of metropolitan areas, the trend is to maximise large plots and bring more people into established neighbourhoods.