Housing NSW has defended the price tag of almost $3 million it paid for a site on Market St in Wollongong, on which an eight-storey seniors housing complex is being built.The 1612sqm site was sold to the NSW Land and Housing Corporation in November last year for $2.94 million.Excavation work has started on the site, where 56 public housing units will be constructed.The price is more than $1 million more than the site - involving two adjoining lots - last sold for in October 2002, when bought by Sienna Developments.The company, directed by real estate agent Peter Taranto and builder Alex Pupovac, purchased the house fronting Market St for $1.075 million and land at the rear for $800,000.Sienna Developments gained approval from Wollongong City Council to build 40 residential units and two commercial offices on the site.The DA was approved in 2006 by Joe Scimone under the former council administration, led by then chief executive Rod Oxley.The council came under scrutiny during the Independent Commission Against Corruption (ICAC) hearings in 2008 for approving developments that exceeded its own guidelines.Both Mr Oxley and Mr Scimone were found by ICAC to have engaged in corrupt conduct.Mr Oxley was found to have created an environment that bred corruption; Mr Scimone's findings related to his handling of the Victoria Square project and accepting a gift from developer Glen Tabak.The Market St site was not reviewed by ICAC and there were no adverse findings in relation to approvals for that site, nor any suggestion there should be.However, Market St residents still argue the development approval issued by the former council administration should not have been used by Housing NSW to justify the scale of its own plans.The $2.9 million price tag was not good value for money, Save Market Street committee spokesman Ian Mackreth said."We would like to know why they would pay what is effectively double the value of the property," he said.The claim came after Sydney media published allegations of other overpriced land purchases by the department in Sydney and Newcastle.But a Housing NSW spokesman said the Market St site, including its DA approval, was valued at $3.003 million by Landsbury's Property."Housing NSW paid just under that," he said.The spokesman said all valuers used by Housing NSW were licensed and had a professional responsibility to ensure the advice was accurate.Colliers International Wollongong managing director Simon Kersten said sales of development sites in 2009 averaged $2000 per square metre in the CBD core and $1500 outside the core. The Market St site fetched around $1800 per square metre."That price would sound about right on those figures," Mr Kersten said.McPhail Real Estate director David Meikle said recent sales indicated developers were paying around $60,000 to $80,000 for each potential unit they could build. With a DA for 40 residential units already approved when the Market St site sold, the land cost about $73,500 per unit.