Sydney, August 24

When Ron Buxton bought his five-bedroom property in Sydney’s Castle Hill for 87,000 Australian dollars in 1979, his was one of only two houses on a dead-end street, ringed by orange groves.

With Castle Hill now a bustling commuter suburb earmarked for rezoning, Buxton and his neighbours have clubbed together to offer their homes as a development block for apartments, banking on a multi-million dollar payday thanks to surge in Sydney house prices and an acute housing shortage.

“We started getting phone calls from agents and developers to help us sell the property but we decided we’d help ourselves,” Buxton, 73, said.

The trend has surged in the past year with home-owners increasingly taking the initiative themselves rather than waiting for approaches from developers, real estate agents say. Developers such as Stockland and Mirvac are also reaping the rewards, boosting profits as new apartments are snapped up.

Sydney’s population of 4.5 million people already spreads over 1,600 square km. With the population expected to rise by 100,000 a year for the next 20 years, urban planners say higher density living is key to providing enough housing.

Approvals for multi-unit projects nationally climbed 28 per cent in past year to record highs, raising hopes that extra supply will help dampen potentially dangerous house price rises. Developers need at least 4,000 sq metres of land for an apartment building, so owners who can club together can command significant premiums.