The 2020 Land Supply and Development Monitoring Report (LSDMP) results are in and while the report is generally positive for Brisbane City Council, stating that “When compared to existing dwelling stock at the 2016 Census, housing in Brisbane has become increasingly diverse”, the more concerning trend shows that "the proportion of dwelling approvals for houses in 2019/20 in Brisbane has increased and the proportion of middle has reduced. Of middle dwelling approvals since 2016/17, the predominant middle housing type in Brisbane are semi-detached, row or terrace houses and townhouses of two or more storeys.” Paradoxically, the same product which has now been banned across most of Brisbane.
The latest LSDMP report data is only up to June 2020 and therefore does not reflect increased house approvals driven by the Home Builder stimulus, which for Queensland is oversubscribed with new home grants skyrocketing to 14,789 through to 29 January 2021, based on data from the Treasury Department.
The swell of detached dwelling approvals is fast consuming Brisbane’s land supply and therefore the ability to deliver density and meet demands for affordable housing choice is becoming a growing concern for those entering the property market, those seeking to age in place and downsize and those needing to change their living arrangements.
The approved supply remains below the target four years supply and since July 2020, anyone who has approved land subdivisions or low-rise multiple dwelling developments is building them. Underpinning this situation:
- The Homebuilder Grant was well oversubscribed, with new home grants skyrocketing to 14,789 through to 29 January 2021 in Queensland. While data for Brisbane alone is not available, this above figure represents an increase in new detached building approvals by 27.8% compared to the same period in 2019 based on data from the HIA.
- Operational works approvals saw an uptick in the latter half of the 19/20FY foretelling the coming wave of land sales.
- Multiple dwellings on the other hand saw a decrease by 18.4% (Source) however this would be expected given the limited applicability of the Home Builder grant to these dwelling types.
- Well located and designed apartment and townhouse stock is seeing impressive resilience, likely brought about by generally positive attitude to COVID-19 recovery, job security and historically low interest rates.
With only three years' worth of approvals in the bag, record new house starts, and greater delays in approval timeframes, it's safe to assume that by March 2021, approved supply in Brisbane will be significantly lower than the data suggests.
There are a number of external factors driving up house prices. As a result, there is increased demand for varied housing products in inner city areas, not just detached dwellings. Talk to anyone trying to enter the residential property market right now, and the story is the same i.e. offers accepted well above market expectations, often sight unseen from interstate. The inability for the industry to deliver new, alternative forms of housing within Brisbane is pushing up prices of exiting stock.
Queensland is a hot market right now and house and unit prices will continue to escalate with the record low interest rates. Southerners are migrating north and cashed-up ex-pats are returning, all looking to make Queensland their home regardless of the cost of entry.
Brisbane's planning policy is well behind where it needs to be to cater to this demand. Not in the sense that purchasing opportunities won't exist for those migrating to Queensland, as it's clear these buyers have the cash to get into the market. It’s the first home buyers, the empty nesters, the down sizers, who cannot afford to buy property within Brisbane anymore. Their options are drying up fast.
Gone is 90% of the residential zoned land which once could accommodate townhouse developments, while any suggestion of below minimum lot sizes, freehold terrace style homes, or dual occupancy or secondary dwellings which don’t meet specific design and locational requirements, are still met with a blanket no.
The data shows that Brisbane is behind its planned supply target by 14,000 dwellings, a gap which will have only gotten wider over the past 6-7 months as a result of the Home Builder stimulus.
Over the past three years, there has been very little, if any, new growth opportunities unlocked which will have been enabled by changes to Brisbane’s Planning Scheme. Brisbane City Council must respond and provide for its citizens or risk losing residents and workers to surrounding Councils.
While I am not ignorant to the pressures Councillors and officers face from local communities, I'm not sympathetic when political ownership is not taken of planning policy or the outcomes which they facilitate. The assessment benchmarks need to be written in such a way as to facilitate good outcomes and prevent poor ones. Councils cannot simply point the finger at the development industry when they do not like what they themselves approved.
My hope is that Brisbane City Council's Housing Strategy will reset the discussion and provide a new direction that will arrest both the upward pressures on land prices and downward trend on choice; And offer more to the residents of Brisbane than either a 400m2 house lot in the outer suburbs, or a high rise apartment in the inner-ring or near transit nodes.
So, what does the Housing Strategy need to do to respond to these pressures?
Here are my key recommendations to Brisbane City Council as they go about writing planning policy for the next generation of Brisbane’s residents:
- Allow smaller lot sizes generally across the city, however in doing so, require applicants to specify the built form outcomes via a Plan of Development (POD).
- Increase the scope of the sub-300m2 lots introduced in limited circumstances in City Plan 2014 but which are now tried and tested and working well. This is similar to the approach BCC took with house height going from 8.5 to 9.5m which was tested in response to flood areas and then adapted it more widely once it proved not to cause the problems once thought.
- Allow dual occupancies in all residential areas as accepted development, particularly on corners lots.
- Provide more flexibility for tiny houses and secondary dwellings across Brisbane.
- Embrace Built to Rent and other shared ownership models by providing supporting and stimulus policies for design, delivery and operations.
- Appropriately up-zone land around parks, public transport stops and centres where the additional amenity justifies these outcomes.
- Stop downzoning of land in well located areas, e.g. Camp Hill, simply because the outcomes of the original intent were not managed well.
In all, the LSDMR is an excellent tool for government, the industry and the community more generally to become more than simply observers to the trends and implications in land supply and development. It’s a tool which, over time, will be honed and as year-on-year data is added, will provide a resource to identify and arrest undesirable outcomes.
Stay tuned for the next instalment on this series where I’ll delve into the planning policy settings of Moreton Bay Regional Council, and how they are tracking to achieve their desired dwelling targets.
By Brad Jones, Director of Planning, Wolter Consulting Group