Urban development policies leading to a mismatch between demand and supply

Urban development policies leading to a mismatch between demand and supply
Urban development policies leading to a mismatch between demand and supply

Urban development policies do not reflect the needs of Australia’s wealthiest group of property buyers leading to a mismatch between the housing stock available and what is in demand, according to architecture and design firm Hames Sharley’s associate director Arun Broadhurst.

Speaking at the Urban Development Institute of Australia’s national congress in Brisbane last week, Broadhurst said public policy around the country was designed with an overwhelming desire to increase the density of capital cities. As part of that, developers were encouraged to build smaller types of housing with one to two bedrooms.

“The problem is that Generation X, which is our most wealthy generation, is of child bearing age and the policies don’t necessarily reflect what they need. They’re still going to need three, four or five bedroom houses,” Broadhurst said.

Most of the members of UDIA are large land developers that focus on green field sites on the city fringes. First home buyers form their main target markets.

Broadhurst told conference delegates that while some first time buyers were interested in one to two bedroom homes, many were still looking for three to five bedroom homes because they were planning to have children in future.

Broadhurst’s comments were based on the findings of The Housing We’d Choose: a study for Perth and Peel report, which was released last year. The research was conducted by Curtin Business School with Hames Sharley managing the project. The report analysed the compromises people in Perth were prepared to make when they bought a home.

The Grattan Institute had put together similar research in 2011 based on the Sydney and Melbourne markets.

The studies constrained people’s decision making by forcing them to make realistic assessments based on their own financial situations.

“If you asked people ‘What do you want to buy?’ people would say a five bedroom house in Kirribilli but we know this is unattainable for most people. [The research] constrains people’s choices by income and available stock to get a better feeling of how the real housing market works ,” Broadhurst said.

The Perth and Peel study found Perth was well catered for in three to five bedroom houses but had a large undersupply of one to two bedroom homes that suited people looking for smaller, more affordable homes. “It’s probably similar in Brisbane,” Broadhurst said. 

“In Melbourne and Sydney there’s a greater amount of housing diversity,” he said.

However, there were opportunities for developers to attract a greater variety of people to live out on the city fringes if they built homes that better suited wealthier growing families.

“Generation X tends to be affluent enough to live in the suburbs of their choosing,” Broadhurst said.

Zoe Fielding

Zoe Fielding

I am a freelance journalist and editor with more than 15 years experience specialising in personal finance, property, financial services and financial technology. A skilled writer and researcher, I have extensive experience producing high quality content for corporate and media clients. I am used to working to tight deadlines and tailoring the pieces I produce to suit a variety of audiences and formats.

Tags: 
National Policy New Developments First Home Buyers

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