The news came as Asbestos Taskforce head Karen Doran said she expects the mass demolition to reach or near the halfway milestone by Christmas, and as the government auctions four blocks in prestigious streets of Red Hill and Griffith next week. The December 1 auctions include a 1081-square-metre block in Arthur Circle.

The price of the land is a sore point for many owners of the asbestos-contaminated houses, who say they can't afford to return to their land and rebuild.

For Carol Treneski's mother, it was devastating. Her mother, now 82 and wanting to remain anonymous, surrendered the Watson home in which she had lived for 53 years for $695,000. In September, the government offered her the cleared land for $632,500, just $62,500 less than she was paid.

"She was absolutely gutted, she felt physically sick," Mrs Treneski said. Her mother never told her husband, who had Parkinson's and died at the end of September. But the offer put paid to her plans to return to the community.

The family had the insulation installed originally and Mrs Treneski said her parents had lived with the guilt since of potentially exposing their three children, as well as grandchildren, great-grandchildren and friends to the deadly material. Her parents had sent her brother into the ceiling when he was a child to retrieve things stored there – winter clothes, bedding, toys and the like.

"The way she expressed it is, all those beautiful memories have a cloud over them now, because she would forever worry that all those people coming to our home might have been exposed," Mrs Treneski said.

When the buyback scheme was announced in 2014, the family was thrown into turmoil, with carers refusing to enter the house for a period, and tradespeople refusing to repair a window and electrical faults.

Her parents left the home in April 2015, her father into care and her mother into the residential village. But she had wanted to return.

"That was her community, that was her support network, they were her friends, everything that was familiar to her was in Watson. Her doctor was walking distance, the shops were walking distance ... mum very much felt safe there."

Another family, who did not want their names used but have provided documents, were given $580,000 for their home. Eight months later, the government offered them the cleared land for $660,000, which was $80,000 more than they were paid. The October 2014 valuation had put their land at $390,000 (and improvements $170,000).

The government gets two valuations for the cleared blocks, but is not releasing them to former owners. It sets the price at or above the highest valuation (but says none have been set above).

In October 2014, when it bought the homes, the government commissioned two valuations and paid the average.

So far, 317 owners who wanted the first right to buy their land back have been sent prices. Just 38 have accepted. Another 48 are still considering the offer; the rest have walked away.

The taskforce said in 36 cases, the price put on the land was higher than the amount it had paid owners for the house and land together. In another 46 cases, the asking price for the land was within $50,000 of the price paid for house and land under the buyback.

Ms Doran said demolitions were well ahead of schedule, with 472 houses down by Wednesday this week, and 480 to 500 to be gone by Christmas.

Twenty-six owners have refused to take part in the scheme, leaving 996 homes – 12 of which are being privately demolished by their owners and the rest by the government. Another 11 townhouses or units attached to Fluffy houses are also in the buyback.

The focus is shifting to sales, with 95 blocks sold and another 33 being auctioned next week, in the final two auctions for the year. Twenty blocks failed to sell at auction and remain for sale over the counter, with about half under offer.

Demolition costs were averaging just under $100,000 per house, and the sales were "the last piece of the jigsaw" before the government could assess the final cost of the scheme, Ms Doran said. The estimate was still a net cost of up to $400 million.

Ms Doran said owners remained living in about 110 Fluffy properties, including the 26 refusing to take part.

Owners who have agreed to sell are allowed to stay till mid-2020, although the sale price remains fixed at the value set in October 2014.

Ms Doran said the government was yet to make a decision on what happened after 2020, including with owners who weren't taking part. The government has made a standing offer to them to be buyer of last resort.