unlocking-land-delivering-affordability

Unlocking Land and Delivering Affordability

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.

PEAKURBAN welcomes Brendon Bolt to the Water & Environment Team.

Brendon has over 18 years’ experience practicing in the field of environment and water resources. His vast experience in local and regional scale projects includes water balance modelling, hydrologic modelling, 1D/2D hydraulic modelling, flood mapping in GIS, conceptual / detailed design, environmental management and permitting, erosion and sediment control, water quality modelling, drainage assessment and … Continue reading PEAKURBAN welcomes Brendon Bolt to the Water & Environment Team.

PEAKURBAN expands into Water and Environment!

We are delighted to announce that Kelly McKendry has joined PEAKURBAN as Director of our newly created Water and Environment Team! Kelly has over 18 years’ experience in stormwater quality and quantity management as well as flood modelling. Notably, Kelly recently managed her own consultancy and is highly regarded in the industry having completed many … Continue reading PEAKURBAN expands into Water and Environment!

Getting Those Credits You’re Entitled to: Converting Non-Trunk Infrastructure to Trunk Infrastructure

By Andrew Ngo We previously wrote about the conversion application process and how to obtain the infrastructure credits that you are entitled to on your projects. Our previous article can be found in the link below. https://www.peakurban.com.au/conversion-applications-get-the-credits-you-are-entitled-to/ To recap, a conversion application is an application that developers can make under the Planning Act 2016 (Section … Continue reading Getting Those Credits You’re Entitled to: Converting Non-Trunk Infrastructure to Trunk Infrastructure

Unlocking Land and Delivering Affordability

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 … Continue reading Unlocking Land and Delivering Affordability

What’s the cost per lot across SEQ Growth Corridors

By Troy Schultz We know that developers need to act quickly to secure development sites. Quite often a quick, informed assessment of a site using typical revenue and cost data is sufficient to enable a site value to be ascertained and a high level offer put in front of the vendor. To assist our clients, … Continue reading What’s the cost per lot across SEQ Growth Corridors

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EDQ have released a new version of their ‘Street and Movement Network’ guideline. The new guideline can be accessed here. There are some significant changes included in the latest revision which may adversely affect development yield and cost. Some more notable changes include: Road reserve widths and pavement widths have changed for all road types, … Continue reading Updated EDQ Road Standards – What’s the impact on your project?

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The engineering and construction industry is at the cusp of a new era, with new applications and tools that change how companies design, plan and execute projects. At PEAKURBAN we are always trying to maximise the value and improve the level of service we offer to our clients. Quite often this involves developing smarter infrastructure … Continue reading Launching PEAK Ai – Improving Project Design, Planning and Execution

Changes to the Security of Payment Act

By Troy Schultz, Principal Engineer, PEAKURBAN At PEAKURAN, we aim to stay on top of key changes so that we are equipped to continue protecting our client’s interests. You may be aware that the Building Industry Fairness Act 2017 (Qld) (BIFA) commenced on 17 December 2018. This replaces the Building and Construction Industry Payment Act … Continue reading Changes to the Security of Payment Act

Managing Costs and Value in a Slower Market

By Andrew Ngo, Principal Engineer, PEAKURBAN There’s a lot of media articles about slower sales and a tighter credit market across the country, especially in Sydney and Melbourne. Having been through a couple of ‘challenging’ times previously, this inevitably affects market confidence with developers attentions more sharply focused on finding cost reductions and optimising value … Continue reading Managing Costs and Value in a Slower Market

PEAKURBAN Turns 2

It’s hard to believe that it’s been 2 years since we opened the doors at PEAKURBAN. You never really know how things will turn out but the journey thus far has been both exciting and fulfilling. We started PEAKURBAN believing that the old way of doing business (at least in engineering circles) was fast disappearing … Continue reading PEAKURBAN Turns 2

PEAKURBAN Planning and Survey

We are delighted to welcome Tim Connolly (Director – Planning) and Nathan Wilson (Principal Planner) to the PEAKURBAN Planning and Survey team. Tim has over 30 years’ experience in statutory and strategic planning and has worked on many large and complex projects including Warner Lakes, Riverbank, Riverparks, Park Vista, Capestone, Brentwood, The Meadows and Ridgeview. … Continue reading PEAKURBAN Planning and Survey

How to Get Your Survey Plans Sealed Earlier

A key milestone for any urban development project is plan sealing, that critical event that facilitates registration of titles and settlements, and the trigger for project revenue to be realised. In talking with several developers, they describe an increasingly arduous and frustrating process of back and forward, multiple inspections, delays and inefficiencies. Whilst there’s always … Continue reading How to Get Your Survey Plans Sealed Earlier

Can’t get stormwater discharge consent? You may not need it.

Whether or not a Legal Point of Discharge (LPOD) exists has been for a long time, a very grey and murky area. The consequences of this ambiguity have meant stalled projects, refusal of development applications, cost over-runs and quarantined development sites. We have heard of some developers even needing to store or pump out stormwater! … Continue reading Can’t get stormwater discharge consent? You may not need it.

Conversion Applications – Get the credits you are entitled to.

In talking with several developers recently, it seems that the issues around trunk and non-trunk infrastructure and what’s creditable v. non creditable is alive and well. A few developers that we’ve spoken with are quite frustrated in having received development approvals imposing conditions that require them to deliver (without credits) what they believe to be … Continue reading Conversion Applications – Get the credits you are entitled to.

Infrastructure Agreements: Negotiating the Right Deal.

By Andrew Hunter, Civil Engineer at PEAKURBAN Negotiating the right deal in an Infrastructure Agreement (IA) is critical in ensuring the commercial viability of a project. On too many occasions we have seen IA’s that are one sided, impose excessive infrastructure standards and as a consequence result in works or financial contributions that stall projects … Continue reading Infrastructure Agreements: Negotiating the Right Deal.

Is Poor Contract Administration Costing You Money?

By Ryan Ashworth, Civil Engineer at PEAKURBAN Poor contract administration can lead to lower development profits, protracted disputes, missed settlements and sub-standard infrastructure. Whether it’s a lack of site experience, a poorly constructed contract or just a lack of understanding of what’s required, it seems to be a common problem we hear throughout the development … Continue reading Is Poor Contract Administration Costing You Money?

Engineering value in a tough market – the site acquisition challenge

By Andrew Ngo, Principal Engineer at PEAKURBAN 2017 so far has been an intensely competitive year when it comes to buying development sites. Despite this, over the last couple of months we’ve helped four clients successfully acquire new projects – three residential development sites (1,830 lots) and one retirement project (145 sites). So, what have … Continue reading Engineering value in a tough market – the site acquisition challenge

Giving up too much land?

A number of clients have come to us recently raising concerns about losing too much developable land, due to easements and wider infrastructure corridors being imposed by Authorities.  The reason, they advise, is for future maintenance requirements.  What many clients may not be aware of is the maintenance method of “pipe bursting” which in many cases, means the … Continue reading Giving up too much land?