23 Sep How The LMR Changes Will Reshape Mosman’s Property Landscape
Recent changes to Low-Medium Residential (LMR) zoning are already causing debate across Sydney. However, in Mosman, their impact could be more complex than many expect.
While everyone assumes new apartments mean more housing supply, my analysis of Mosman’s market suggests we’re about to see the opposite effect for family homes and particularly entry-level semis for young families. As a Mosman-based property professional who lives and works in Mosman, I’m observing market dynamics from the LMR changes that extend beyond the influx of new luxury apartments.
While much of the discussion around LMR focuses on increased housing supply, my analysis of current sales patterns and buyer behaviour suggests we’re about to experience some interesting market shifts that investors and homeowners should understand.
The Luxury Apartment Boom: Solving One Problem, Creating Others
The wave of group home sales to developers in Mosman has been unprecedented. Premium family homes are being acquired for luxury apartment developments, often with 18-24 month settlement periods. These new developments are undoubtedly addressing one market need: high-end downsizing options for empty nesters who previously had limited choices beyond older, smaller apartment blocks with stairs and no lifts.
But here’s where the market dynamics get interesting—and where I see significant opportunities and risks emerging.
The Buy-Back Wave
What many aren’t anticipating is the impact when these homeowners who’ve sold to developers need to buy back into the market in 18-24 months (most developers require longer settlements to get the plans through council). Most aren’t leaving Mosman permanently and when they receive their funds, they’ll be competing for a diminished pool of available family homes.
For example, a large mega-lot of twelve house on Rangers Ave and Brierley Rd sold for approximately $85 million to a developer who is looking to build an eight storey apartment building of 80-100 units.
Two Market Opportunities I’m Tracking
1. The Family Home Supply Squeeze
I predict we’ll see accelerated price growth for existing family homes outside the LMR zones within 2-3 years. Here’s why:
- Luxury apartments will successfully capture the downsizer market, but won’t reduce family home demand
- The same pool of family buyers will be competing for fewer available properties
- Sellers to developers will return with substantial capital to compete for remaining family homes
2. The Affordable Apartment Gap
The new luxury developments I’m seeing are targeting the $4-16 million market segment. This leaves a significant gap for:
- First home buyers seeking apartment living
- Young professionals and families needing more accessible price points
- Investors looking for rental yield properties
Those charming Art Deco apartment blocks and smaller unit complexes that are not in the LMR and which developers aren’t targeting? They’re becoming increasingly valuable as the only pathway into the Mosman market for non-luxury buyers. We see these assets as holding their value well and returning ~4%+ gross rental yields.
The Timing Element Most Are Missing
The staggered impact of these changes means we won’t see the full effects immediately. The long settlement periods create a delayed reaction where:
- 2026-2027: New luxury stock comes online while cashed-out developer sellers return and want to buy back into the market
- 2027-2028: The supply-demand imbalance for family homes becomes more pronounced and prices increase above normal market rates
What This Means for Different Property Buyers
- For downsizers: The new luxury apartments represent an unprecedented opportunity—but early movers will have the best selection and prices will be premium.
- For family homeowners outside LMR zones: Your properties may become significantly more valuable as the available supply shrinks.
- For investors: Older apartment buildings and smaller complexes may offer both rental yield and capital growth opportunities as they become the “affordable” option.
- For first home buyers: Act quickly on existing apartment stock before the supply-demand gap widens further.
Local Market Intelligence Matters
These insights come from living and working in Mosman and seeing which properties developers are targeting, understanding buyer motivations, and recognising patterns that the broader market may not see.
While the LMR changes will add housing supply, the concentration on luxury downsizer apartments leaves substantial unmet demand across other price segments. These market gaps represent both challenges and opportunities that investors should understand as the dynamics reshape over the next few years.
Looking To Buy in Mosman?
If you’re considering buying a home or investment in Mosman, our local knowledge can give you an edge. Bernadette Brennan, our Mosman specialist, is not only highly experienced — she’s also a Mosman local.
Feel free to reach out for a confidential conversation about current opportunities in the area.