The two sites are the first to be released under the ACT government’s planned transformation of the foreshore area.

The blocks of land sold for $4.5 million each on Thursday. There were six registered bidders.

When completed, Southquay will have more than 1000 new dwellings and more than 3000 square metres of commercial space.

The precinct will consist of 13 sites along the eastern and western sides of Lake Tuggeranong.

The western side between Anketell Street and the lake is set to be developed first.

An 8219 square metre waterfront site for between 72 and 95 dwellings sold under the hammer following bidding between two parties.

Michael Dalton from P & P Real Estate, who bid on behalf of Kendrick Enterprises Pty Ltd, said Tuggeranong had had a lack of stock in recent years and there was strong demand for more dwellings in the town centre.

He said there was also a lot of interest for waterfront properties.

Initial plans for the site included a mix of terrace housing and apartments.

The second block of land could accommodate twice as many dwellings and offer commercial opportunities because the site fronted Anketell Street.

More than 40 bids were placed by three parties and the 9729square metre block eventually sold for $4.5million.

Empire Global, which recently bought a mixed-use site at Amaroo, was the successful bidder.

Managing director Tomislav Simunic said the company planned to build three towers of four, six and 10-12 storeys.

The site could hold between 165 and 211 dwellings.

“Tuggeranong is out of stock and I think there’s a real need for it,” he said.

Economic Development Minister Andrew Barr said the sales showed there was still strong interest in medium-density development generally but also that developers were keen on building in the Tuggeranong town centre.

He said five more sites would be released over the next two financial years, which would provide a further 700 dwellings.

Mr Barr said the Tuggeranong Master Plan had supported the idea of providing a residential boost for the town centre and the Southquay Greenway precinct was an important part of this.

He said land releases in the area had been challenging as there were no greenfield sites to release.

“The urban infill opportunities are important to provide a boost to Tuggeranong’s population which has otherwise been declining a little,” Mr Barr said. “I think it’s a pretty desirable location and it’s good to be able to release a number of sites in Tuggeranong.”