Perth is facing a housing supply shortage as demand is projected to outstrip supply within the next three years, threatening housing affordability in region, according to a report released today by the Urban Development Institute of Australia (UDIA WA).
The report, Housing our Community: Acting Today to avoid tomorrow’s housing crisis, outlines the concerning impact that restrictive planning controls, infrastructure constraints and land fragmentation are having on the industry’s ability to deliver adequate housing to the market.
“This report is sounding the warning bell for all stakeholders involved in delivering housing to the Perth and Peel community,” UDIA WA CEO Tanya Steinbeck said. “If we keep progressing in a ‘business as usual’ way, there is absolutely no doubt we are heading for a major housing crisis.”
“The current rental crisis is really just the tip of the iceberg,” Ms Steinbeck said. “Gone are the days when we can rely on the development industry to simply ‘turn on the tap’ and ramp up the production of new lots and apartments to meet a lift in housing demand.”
“There is a perfect storm forming on the horizon. Just as we anticipate international borders re-opening and an influx of people choosing to call Perth home, we will effectively have run out of developable land that can respond quickly and efficiently. These supply constraints will push up housing prices across Perth and Peel unless we address the issues now,” Ms Steinbeck said.
The report considers both greenfield and infill areas and shows that in both areas, there is limited capacity to quickly ramp up lot production and deliver housing to meet buyer demand.
“Without an adequate supply of land for new housing and readily available development sites, housing will become even more expensive for everyone, both renters and purchasers,” Ms Steinbeck said.
“This situation leads to households having to compromise on the type of home that suits their needs and the location they want to live, such as close to family or employment,” Ms Steinbeck said.
Key issues that the report highlights include:
- Zoned and serviced large land parcels with workable development constraints are becoming increasingly scarce. There are no new ‘masterplanned’ developments coming on stream.
- Planning delays in relation to infill areas are significant and stymieing the delivery of projects in a range of areas.
- Site acquisition, securing finance, navigating the development approval process and securing sufficient pre-sales means that built-form development takes significantly longer than detached housing to be presented to the market.
- There are few, large, consolidated infill development sites available.
Ms Steinbeck says that UDIA WA wants to inform those with a fundamental misunderstanding around how much ‘developable’ land is available in Perth and Peel.
“We want to ensure that there is a clear understanding around what is available and what can be realistically delivered within what timeframes, so that we can work collaboratively with government on the solutions,” Ms Steinbeck said.
“If we can agree on the problem, we can start working on the solutions.”
The UDIA report highlights that the supply of large master-planned communities is diminishing with the majority of these estates now close to being fully developed. In most corridors there are less than 10 large estates operating and in the north-east and south-west corridors there is less than 5 years worth of lot supply remaining.
These estates have typically provided half of Perth’s new dwellings and helped to keep a lid on house prices during periods of peak demand. This is particularly concerning as anytime the supply of housing lots has dipped below 1.8 lots for every lot demanded by the market, the Perth median house price lifted.
“While the figures are concerning, UDIA WA has recommended several practical solutions that can be implemented to ensure that WA is prepared for future demand for housing,” Ms Steinbeck said.
“Firstly, we need to start tracking housing supply accurately so that we have a clear picture of what is happening in the market and what it is in the pipeline,” Ms Steinbeck said.
“Then we need to look at being much more strategic about prioritising development areas and allowing proponent led solutions to deliver housing in areas that are going to be accepted by the market,” Ms Steinbeck said.
UDIA WA recommendations:
- UDIA WA to establish a detailed housing supply monitoring program – live tracking housing supply and demand.
- Introduce a strategic approach to prioritising development areas and allow proponent led solutions to deliver housing supply
- Remove the pseudo urban growth boundary that exists under the Frameworks
- Introduce Priority Development Areas within the Sub-Regional Frameworks
- Establish State Government Growth Areas Team supported by a Housing Supply Advisory Group
- Take control of infill delivery with district level planning strategies created by the State
- UDIA WA propose that small local government authorities in infill areas no longer prepare Local Planning Strategies and Schemes and that DPLH prepare them centrally and collaboratively at a district level
- Re-establish the primacy of planning as the critical foundation for a prosperous WA
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- Transition the Department of Planning, Lands & Heritage to a central government agency with the commensurate resourcing required to lead the way our city and state develops in the future
- Expand the highly successful Significant Development Assessment Unit and transition the unit to reflect Queensland’s State Assessment and Referral Agency (SARA)
- Establish an Environmental Planning Team within DPLH
To view the report in full, click here.
Ends.
Contact:
Chris Thurmott
Communications Officer
UDIA WA
P: 0406 271 895
E: cthurmott@udiawa.com.au