Unlocking Land and Delivering Affordability


By Brent Thomas (Published in UDIA Qld Establish Magazine #112 - Spring 2019)

By Brent Thomas (Published in UDIA Qld Establish Magazine #112 – Spring 2019)

In all growth corridors across South East Queensland (SEQ), it is widely known that there are major land holdings in the urban footprint (UF) that have been identified as suitable for urban development, but have been locked up due to any range of issues. Most notably are the misalignment between Council planning schemes and the South East Queensland Regional Plan UF (SEQRP UF), fragmentation of land ownership and infrastructure planning and delivery. The process of taking land from strategic designation to shovel ready is so disjointed, with no single entity having responsibility to implement the delivery of land for development. Inevitably, this means market opportunities are missed, projects are stalled, costs increase and affordability comes under pressure. Despite having an UF, infrastructure planning always seems to be at least one cycle out of alignment with land use planning and it is then left up to developers to resolve servicing solutions on an application by application basis.

I am a civil engineer and have been involved in the development of tens of thousands of new housing lots across SEQ throughout my career. You’d hope I’d have learned a thing or two in that time. Which is also why I question what benefit the establishment of a SEQRP UF has actually delivered. In saying this, my focus is on the observable outcomes, not the intent – however meritorious.

Has it improved affordability? Has it improved the range of housing choices? Has it aligned future supply with rising demand in the areas where the land is actually required? Has it stimulated a competitive market? Does it cater equally for inner city as well as suburban communities? Does it give the public confidence in knowing where future development will occur, and when? Has it resulted in better infrastructure planning and more certainty for developers who create communities for Queenslanders?

I understand that we need to have some plan that shapes and guides the way our region develops and where people will settle, but too much interference and policy red tape creates uncertainty, confusion and elevates risk and results in unnecessary costs to projects, which exacerbates affordability pressures.

Land supply is central to addressing affordability and containing land via an artificial boundary does little but artificially inflate land prices. Recent englobo sales data from Ray White Special Projects (RWSP) revealed that on average in 2018/19 in the corridors of Logan Reserve, Flagstone, Ripley and Moreton Bay, developers paid on average $940,000 / ha for land within the UF compared to $91,000 / ha for land outside of but adjacent to the UF. Converting this to a cost per lot using 15 dwellings/ha delivers a stark comparison – $62,600 / lot for land inside the UF and $6,000 / lot for land outside the UF. The tenfold difference in price is the artificial ‘line on the map’.

With dwindling englobo land supply, purchase price growth in the last four years for land suitable for development within the UF, has been significant as evidenced below (data courtesy of RWSP).

Corridor Price in 15/16 ($/ha) Price in 18/19 ($/ha) Increase
Logan Reserve/Park Ridge $727,000 $1,012,000 39%
Ripley $216,000 $380,000 75%
Moreton Bay $973,000 $1,399,000 44%
Pallara $1,360,000 $1,502,000 11%

Development costs are also increasing with the average cost to deliver a detached lot in SEQ being $98,511 / lot (PEAKURBAN, 2019). Varying standards, location and topography result in a range across the SEQ region from $82,150 / lot on the Sunshine Coast, $105,430 /lot in Moreton Bay to $121,390 / lot in Brisbane North. Perhaps a focus on consistent infrastructure standards across SEQ would help deliver cost efficiencies.

So, what’s needed to help unlock land and deliver housing with certainty and at the lowest cost?

  • Have a Regional Plan with teeth or don’t have one at all. Align Council planning schemes with State UF areas to remove conflict and provide certainty;
  • Plan for the longer term and base infrastructure planning on UF areas, not Council planning scheme areas. This assists in investment certainty for Authorities and minimises delays caused by ever changing planning schemes and priorities;
  • Ensure infrastructure solutions are developed cognisant of the housing stock type and price point for the area. Start with the end sales price for the land and work backwards to develop a servicing strategy that works for the area;
  • Consider alternative infrastructure funding models to deliver catalytic infrastructure for major growth areas. Municipal bonds have been widely used in other parts of the world to finance and deliver key pieces of infrastructure.

More appropriate development land is needed in SEQ if our growth targets are to be met. Failure to do so will see demand accelerate beyond supply – a policy induced problem which will only see land prices rise further and worsen the affordability problem in the region.

Read more

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7 September 2021 – Do you know how much it cost to develop a site in Moreton Bay? How about Logan, Ipswich, Brisbane, or the Sunshine Coast?

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