Australia

UDIA issues 'damning' assessment of land supply in Australia's cities

THE peak industry body for the urban development industry, the Urban Development Institute of Australia, this week released its annual UDIA State of the Land Report, providing a critical assessment of the land supply situation in Australia.

The report, the third to be produced by the UDIA, examines the supply of new residential lots in the major capital cities of Australia (Sydney, Melbourne, Brisbane, Perth and Adelaide).

The UDIA said the report issued a "damning verdict," with an undersupply of housing across the national housing market producing substantial pressure on housing affordability.

UDIA National President, Peter Sherrie, said: "the report illustrates the growing gap between land supply and demand throughout Australia. It paints a concerning picture for policy makers and importantly, for new homebuyers looking to enter the market."

For the first time, the report ranks the major capital cities in terms of their performance in providing adequate supplies of residential land to meet the demand for housing.

Melbourne is found to be the leader in terms of land supply, followed by Adelaide, Perth and Brisbane, with Sydney coming in last.

The report states that housing demand remains strong due to high levels of immigration, natural increase and changing household formation patterns.

The planning system and infrastructure contribution charges are cited as reasons causing the current undersupply of land:

"Attempts to unlock land supply are constantly being undermined by significant delays in the planning approval and rezoning processes; the time, costs and complexity of meeting environmental compliance requirements have contributed to an artificially scant supply of land.

Another common obstacle being experienced is the rising infrastructure charges initiated by local councils and utility companies… have the ability to make projects unviable… Related to the issue of infrastructure provision is the lack of coordination between utility providers and planning authorities which increase project risk through delay and uncertainty." (p. 2)

To improve lot production and delivery in Australia's cities, the report provides four recommendations, summarised as:

  • 1. The Commonwealth Government implement a long-term national urban strategy;
  • 2. The Productivity Commission be charged with undertaking an inquiry into financing local infrastructure;
  • 3. The Federal Department of Sustainability, Environment, Water, Population and Communities establish or revise bilateral agreements with all State and Territory Governments in relation to the Environment Protection and Biodiversity Conservation Act; and
  • 4. the Federal Government conduct a thorough bi-annual audit of all Commonwealth-owned land in order to regularly update its Register of Surplus Commonwealth Land.

The report, '2011 UDIA State of the Land Report', is available from the Urban Development Institute of Australia website at <http://www.udia.com.au/>.

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