ONE OF THE THINGS THAT UDIA MONITORS IS LAND AVAILABILITY. THIS MAY SEEM LIKE A SIMPLE AND LOGICAL THING TO DO BUT IT IS A LOT HARDER THAN IT LOOKS.
Firstly, even the definition of land supply can change depending upon your interests. Government look at supply in relation to the total land available for development.
The Urban Growth Monitor released late last year by the Department of Planning said the total stock of urban and urban deferred land in the Perth Metropolitan, Peel and Greater Bunbury was 110,610 hectares. Under a “business as usual approach” it is estimated that stocks could accommodate a city of approximately 2.76 million residents and would last until about 2038.
On the other hand, if the growth targets in the Department of Planning’s Directions 2031 and Beyond are achieved, the amount of land used would decrease substantially and existing stocks of urban and urban deferred land could theoretically support a population of 3.62 million and could last until 2063.
That is the “notional” land supply calculation, the harder step is working out how much of that land is practicable to bring to the market. Some have significant environmental constraints, others are challenging for infrastructure provision and the reality is that not every landholder wants to, or indeed is able to, bring their land to the market.
The Department’s own figures show that around a third of conditionally approved lots in Perth don’t get developed within the four year approvals window so there is a shared understanding that zoned land does not always get developed.
The land that is available for purchasers is what UDIA refers to as the “actual” land supply and conditions are tightening. We calculated supply six months ahead by combining the lots on the market with lots under construction for release within six months and comparing that figure with predicted sales for the same period (based on the current sales rate). In a number of areas there is less than two month’s surplus supply to accommodate demand growth including the City of Wanneroo, City of Swan, City of Armadale and the City of Cockburn.
There is a third level of land supply: “titled stock,” which the builders are interested in as they cannot commence construction until settlement has occurred and titles issued. Whether it is actual or titled stock, things are tightening up in the Perth market even though our notional supply will last years.