Significant dwelling supply problems across country: UDIA report

Significant dwelling supply problems across country: UDIA report
Significant dwelling supply problems across country: UDIA report

The Urban Development Institute of Australia's 2014 State of the Land Report points to significant supply problems across much of the country and warns that while it might not be a 'front page' hot media topic of the day, "we've got a problem".

Quoting Minister for Social Services Kevin Andrews from November last year, the report, launched today, explains that more private dwellings need to be built to cater for a growing population.

The report found that while lot prices have remained stable or fallen slightly in recent years, the price of land when looked at on a per square metre basis has continued to rise. The overall fall is due to declining lot sizes, according to the report. The average median lot size across the five largest capital cities is 423 square metres, down 8% over the year and down 29% on 10 years previously. Sydney saw a 16% drop over 2012/2013.

The average median lot price across the capitals is $213,000 - down 5% over the year. Despite this short-term fall, it is up 78% over the last 10 years. In Sydney, the median price for a new landlord fell $34,000 over the year period, to $247,500 and the city retains its position as the most expensive for land across the country.

"This suggests that current lot prices may be close to the absolute upper limit of what new home buyers are able to afford," the report explains.

Supply of land lots was found by the UDIA to be continually constrained in "most jurisdictions" by high charges levied on new developments and the inadequate provision of infrastructure, as well as delays in rezoning, planning and approvals.

Interestingly, Sydney experienced the largest turnaround over 2013 out of the cities examined, with a significant increase of supply. Despite this, it still suffers from the highest infrastructure charges, a difficult planning system and increasingly high land costs. Meanwhile, Perth was found to have the worst performance.

Currently, the average median price of land said to be paid by new home buyers is $504 per square metre. That is a 3% increase over the year and 148% up over a 10 year period.

UDIA national president, Cameron Shephard, said that governments are failing to address the key barriers to supply.

“Inadequate investment in urban infrastructure, slow planning and approvals systems, and high taxes and charges are strangling the supply of land for new housing, severely damaging housing affordability," he said.

“UDIA is concerned that housing has fallen off the agenda for governments around the country. The 2014 UDIA State of the Land Report shows that there are still major problems with land supply and housing affordability across our largest cities, and that governments need to take urgent action,” Shephard explained.

See over page for a city by city breakdown of performance and for the UDIA's suggestions for federal, state and local government intervention.

City by city performance


Progress has been made with stamp duty exemptions and construction grants, introduction of private certification for code compliant developments, structure plans for growth areas and rezonings. Fairly balanced land market.

Potential trouble area: Implementation of the infrastructure agreements.


Improvements in planning processes under State Planning Policy introduction, creation of single state assessment and referral agency and creating a number of Priority Development Areas.

Potential trouble area: The undersupply of serviced lots and inability to respond to changes in market demand.


Lot supply has increased, market is well supplied and affordability is improving.

Potential trouble area: Slow approvals and rezoning.


Affordability and lot supply did well, with stable prices.

Potential trouble area: Increasing delays in planning approval system, increasing land taxes and subdivision application fees, infill and infrastructure provision planning worsens.


Lot production increasing, lots somewhat cheaper due to smaller lots being created.

Potential trouble area: Structural planning reforms have yet to appear and strata reform has been delayed.

UDIA's suggestions for the federal government:

Providing additional funding for investment in new urban infrastructure, in order to unlock land.

Auditing Commonwealth land holdings to identify surplus land, and where suitable, make it available for new housing development.

Assisting state governments with removing stamp duty on property and replacing it with more efficient forms of taxation.

UDIA's suggestions for state and local governments:

Undertake major planning system reform, to increase the supply of urban land and reduce delays and uncertainty associated with zoning, planning and approvals processes.

Reduce up front charges and levies on new housing by favouring the recovery of costs over long time frames, rather than up front.

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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