Delayed infrastructure roll-outs, time-consuming planning processes and increasing charges of levies for new housing is constraining land supply across the country putting considerable pressure on housing affordability.
The Urban Development Institute of Australia (UDIA), released its annual State of the Land Report in March which provides the most comprehensive assessment of land supply in Australia’s capital cities.
UDIA is the peak industry body for the urban development industry and its 2012 State of the Land Report highlights the insufficient levels of land supply in Australia’s major cities.
UDIA National President Julie Katz said that, “Releasing a steady stream of serviced land to the market is critical if we are to overcome our affordability and housing supply challenges”.
“The report makes a strong correlation between historically low levels of lot production and higher land prices, the net effect of which is declining levels of affordable housing,” said Ms Katz.
“While the barriers to supply vary from state to state, there are commonalities nationwide. For one, the roll out of infrastructure is delayed in most jurisdictions and is holding up vast areas of developable land.
“In addition, planning approval processes throughout Australia are characterised by delays and uncertainty. Another common barrier in most jurisdictions is ever-increasing infrastructure charges or homebuyer levies, which are adding to the cost base of developments and rendering many projects too expensive to pursue.”
According to the report, Sydney continues to experience a chronic undersupply of serviceable land, with forecast data showing it producing the least lots in the country.
The supply of land is spiraling downwards in Brisbane, with the city producing its lowest level of lots in a decade. Perth has experienced a slight increase in lots produced, while Adelaide and Melbourne have performed relatively well. However, none of the capital cities are well placed for a potential surge in demand.
UDIA’s recommendations to solve the problem
1) Federal and State Governments should provide more funding to Local Governments and relevant state agencies for the financing of local infrastructure.
2) Each State Government should create a body to coordinate and monitor the timely, efficient and coordinated roll-out of infrastructure in both greenfield and infill developments.
3) State and Territory planning systems should be made consistent with COAG’s nine criteria for future strategic planning of capital cities.
4) Through the identification of leading practice, State Governments should encourage local councils and relevant state agencies to reform the processes involved in assessing applications for development.