Money Out of Thin Air: The Multibillion-Dollar Rooftop Housing Play

Turns out, it is possible to make money out of thin air. Rooftop airspace is emerging as a $3000-a-square-metre asset—and a new frontier for housing supply. Nationally, rooftops could yield more than half a million homes. In NSW alone, reforms have unlocked $22 billion above 20,000 apartment blocks. The opportunity sits in the gap between a roofline and the maximum height allowed under planning controls. Creating an airspace title usually requires a subdivision approval from council. Strata owners must consent, and the new lot is then registered with the state land titles office. Once established, it can be sold, developed or kept vacant. Owners often sell to developers who add homes, while in prestige suburbs neighbours are paying to keep rooftops empty and safeguard views. ▲ Buy Airspace founder Warren Livesey sees rooftops not as liabilities but as untapped housing supply. Buy Airspace founder Warren Livesey tells The Urban Developer the hidden market is accelerating as more players discover value in “thin air”. “Owners can unlock equity, neighbours can protect views and developers can add homes without touching the ground,” he says. “It’s ultimately making money out of air.” The push is not just local. Livesey is the Australian affiliate of the Association of Rooftop and Airspace Development (ARAD), a global body with 15,000 members across the US, UK and Europe. Last week, ARAD partnered with Prefab Council Australia to standardise methods and press for national policy reforms. Approvals sliding, targets rising The shift comes at a critical time. Australia approved 14,744 new homes in August—down 6 per cent on July, according to the Australian Bureau of Statistics. ▲ Redevelopment of 124 Campbell Parade, Bondi, where a $23m penthouse sale highlighted the value of rooftop airspace. To meet the federal target of 1.2 million homes in five years, monthly approvals would need to average closer to 20,000. Apartments were hardest hit, down 8.1 per cent, with NSW and Victoria falling more than 11 per cent. Livesey says rooftops can help close the gap. “If every three-plus storey building was to add an additional level, we would create 500,000 new rooftop homes nationally,” he says. “In Sydney, that’s about 150,000. Melbourne, a similar amount, about 150,000 and Brisbane about 120,000, and then Perth is the remainder.” One in four rezoned buildings might still be demolished and rebuilt, he says, but the bigger play lies in the three out of four left standing. ▲ Rooftop additions under way at 20 Illawong Avenue, Tamarama, where Buildcorp is delivering two new penthouses and upgrades across the 1970s block. Rooftop homes can deliver 50 to 60 per cent returns, compared with about 20 per cent on traditional rebuilds. In NSW, low and midrise reforms have expanded envelopes across roughly 20,000 apartment blocks, creating an estimated $22 billion in airspace potential. “It’s created this airspace now people can build into,” Livesey says. “Instead of wasting the money on just replacing a roof like for like, we’re suggesting to replace it with a new rooftop home instead, which creates an asset opposed to just a straightforward expense.” From Bondi to Randwick Buy Airspace points to more than 70 rooftop additions across Waverley, Randwick and Woollahra councils, with nearly one in five new DAs in Waverley now involving rooftops. The model is simple. Owners tender roof space to developers, who fund the DA, build lightweight prefabricated homes and sell the new penthouse. Proceeds are shared, with much of the money recycled into fire, lift and facade upgrades. “Where the typical roof would weigh 30 tonnes, we remove that and put on 40 tonnes worth of new rooftop home,” Livesey says. “We’re not wanting to overload the building, which is why it’s generally one or two levels only.” He prices airspace at roughly $3000 a square metre. Construction—often cross-laminated timber—sits around $5000 to $7000 a square metre. Finished stock in prime suburbs can sell for $16,000 to $18,000 a square metre. A market for views Not every deal ends with new homes. In prestige suburbs, some pay to keep rooftops empty. ▲ Aerial view of 845 New South Head Road, Rose Bay, where rooftop airspace was sold to a neighbour to protect Harbour views. Chem Property co-founder Chaim Lieder points to Rose Bay, where the neighbour of 845 New South Head Road bought the air above the site to preserve a Harbour view. “Objections are slow, uncertain, and rarely permanent,” Lieder says. “By contrast, subdividing and purchasing the airspace secures the outcome at the title, giving certainty no objection can.” For the developer, selling airspace was a way to bank profit without redesigning or delaying. “Interestingly, it seems the developer sold only the height but retained the floorspace,” Lieder says. “From what we understand, they later returned to council to capture some of that extra floorspace under the LMR controls, even after carving out the height.” ▲ Elevation drawings of 845 New South Head Road, Rose Bay. The amended scheme was approved but the roof airspace was later sold to a neighbour to block further height. The deal reflects a broader shift. “Owners are no longer relying on the planning system to protect their outlooks, they’re creating their own certainty through private agreements,” Lieder says. “In markets where views can make or break millions in value, people are willing to treat airspace the same way they treat land—as an asset.” So far, most “buy-to-block” trades are in the east but Lieder expects the logic to spread to the lower north shore. Unlocking a hidden asset Livesey spent a decade in London and New York before moving to Australia to build a business around a simple idea: turn rooftops from liabilities into assets. “Often the roof space is seen as a liability for buildings because they have to repair and replace it,” he says. “What we do is put a title around the rooftop and create an asset that can be used to leverage loans in order to build up.” International precedents help. Livesey points to a pipeline of about 140,000 rooftop homes in London and says a large share of affordable delivery there ties to airspace projects. Paris has exempted rooftop homes from tax, spurring adoption of the Mansard roof. New York has long traded air rights, producing some of the world’s tallest towers. By contrast, Australia is only beginning to catch up. Sydney ranks around 800th globally for density, Livesey says, yet its approvals pipeline is shrinking and knockdowns still dominate urban renewal. “The beauty of airspace is it works with what we already have. Instead of bulldozing buildings, you add new homes and upgrade the ones below at the same time.” Policy and sustainability Livesey says the potential extends well beyond prestige enclaves. He wants national consistency, with airspace embedded in planning law, uplift bonuses codified, delivery targets set and sustainable projects rewarded with credits. ▲ Source: The Urban Developer “Airspace provides an alternative to the knock-down and rebuild strategy,” he says. “It allows owners to stay living and invested instead of selling out and getting their building knocked down, rebuilt and sold off to the highest bidder.” Prefab systems cut waste, while cross-laminated timber halves emissions. “One of the quickest ways we can reduce emissions is to build up, not bulldoze,” Livesey says. The BEAM report released this year echoes the point. “Retrofitting existing buildings delivers substantial carbon savings compared to demolition and rebuild, while extending the functional life of housing stock,” it says. Prefab Council Australia chair Waco Tao agrees. “Prefab is the key to building faster, smarter and with less waste. Applying these methods to rooftop and airspace development is a natural evolution for our industry.” What’s next Awareness remains low. “I’d say only one in 10 people have even heard of airspace,” Livesey says. “They don’t know the roof belongs to the owners. They think it’s owned by the top floor residents or the government. It isn’t. “Airspace, when you buy a property, is yours from heaven to hell. It’s just how much of it you can use is defined by government.” Most rooftop deals stay quiet due to private negotiations and NDAs. “What was once dismissed as a unicorn concept is quickly becoming one of the most profitable and hidden corners of the property market,” Livesey says. “If you actually knew how many airspace projects are now happening, it would be the fastest-growing property division.”

Money Out of Thin Air: The Multibillion-Dollar Rooftop Housing Play

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