They may look like a bargain on paper – bushland blocks for under $40,000 – but property experts warn many of Australia’s so-called “zombie suburbs” are unliveable and unlikely ever to be developed.
Known as paper subdivisions, these estates were carved up decades ago into small residential lots, often without basic infrastructure such as water, sewerage or road access.
Despite being advertised as affordable land investments, most are zoned non-urban or sit in environmentally restricted areas, making it near impossible for buyers to ever build a home, realestate.com.au reported.
For brokers, these listings are a timely reminder to guide clients on due diligence – ensuring investors understand zoning, title restrictions, and council regulations before financing undevelopable land.
University of Melbourne urban planning professor David Nichols said most of these “zombie suburbs” stem from early 20th-century subdivisions.
“People have just held on to them as low-cost investments that they or their descendants can capitalise on at a later date,” Nichols said. “In the meantime, they get rezoned so that they are no longer tenable as residential sites.”
He described them as “the living dead of the real estate market” – plots that can be bought and sold but will likely never host a home.
The coastal enclave of North Arm Cove, designed in 1918 by celebrated architect Walter Burley Griffin, was originally planned as a grand port city. More than a century later, most of the land remains bushland.
According to MidCoast Council, properties in the area are zoned non-urban and cannot be built on unless a dwelling entitlement exists. Still, the cheap price tags continue to attract buyers.
LJ Hooker Hawks Nest agent Lisa Dale said that hasn’t stopped interest.
“They’re becoming more and more popular as an affordable holiday getaway,” Dale told realestate.com.au. “They serve a purpose for those that might not be able to achieve the dream of homeownership.”
In Melbourne’s Sunshine North, the century-old Solomon Heights subdivision offers sub-$300,000 land within 10km of the CBD – but it remains largely undeveloped due to rezoning and environmental protections.
Nearby, Altona’s Burns Road Estate was carved into 550 lots in the 1920s but later rezoned industrial. Lot sizes are too small for warehouse development, and progress to amalgamate blocks remains slow. Still, properties sell – one for $67,000 just last week.
Further south, the Cemetery Estate in Hastings has been effectively frozen since the 1970s, wedged between a crude oil storage facility and gas plant. Authorities have restricted human habitation due to safety risks, and most lots have been acquired by the council or nearby industry.
In Helensburgh, south of Sydney, more than 500 lots dating back to 1890 remain undeveloped due to strict environmental zoning designed to protect the Royal National Park and nearby waterways.
While a handful of plots have sold this year for under $100,000, development remains off-limits. Despite repeated attempts, the land has not been rezoned for residential use.
With housing undersupply and affordability pressures driving demand for vacant land, some buyers view these plots as speculative investments. But Nichols warns the odds of change are slim.
“The sites that would come under the zombie subdivision umbrella I don’t think are suitable for housing, unless there was a real change in standards or expectations on where housing could go,” he said.
“There are some people who have thought ‘it’s worth the risk of throwing a bit of money at something, who knows, maybe one day there will be a change’ – I think it’s highly unlikely.”
While “zombie suburbs” can lure would-be investors with low price tags, brokers can play a vital role in educating clients about lending limits and land risks. Many of these blocks fall outside normal valuation criteria, may be uninsurable, or fail to qualify for standard mortgages due to zoning and service restrictions.
As Nichols noted, “they’re trapped in suspended animation” – a warning for brokers and buyers alike that not all land sales are what they seem.
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