Perth could face severe land shortage in next 20 years: Knight Frank
There could be a severe shortage of housing stock in Perth over the next 20 years as the population grows faster than the city's supply of residential land, according to a report by Knight Frank.
A further 280,000 dwellings will be required over the next 20 years, but developers’ stock of lots with conditional approval is just 43,000, according to the Knight Frank englobo land report.
Australian Bureau of Statistics suggest an average annual population growth of 1.85% in the greater Perth region over the next 20 years, pushing the population up 727,000 to 2.49 million people by 2031.
Source: Knight Frank
Knight Frank director John Corbett says there is an increasing gap between englobo land parcels (undeveloped land zoned for closer settlement growth with potential for subdivision) reaching the market and the demand for housing, with the median price for residential land up more than 10% over the last 12 months.
“The availability and development of englobo land has slowed in recent years and will lead to increased prices and significantly increased rents in established residential properties,” Corbett says.
“The many factors that have restricted residential land releases don’t appear to be abating. A tightening of credit and a softening in sentiment because of economic uncertainty in Europe are holding back the market, however, pressure is building for prices to increase”.
He says the current demand for housing lots is putting increasing pressure on government and developers with northern and southern suburbs such as Yanchep, Baldivis and Byford continually expanding to meet demand.
Baldivis, Yanchep and Byford are the top three suburbs for conditional approved lots, with 7,834 proposed lots between them.
The report says the supply of new land for residential development in WA is constrained by variations between councils on developer contributions; a constrained sand supply; environmental considerations and approvals; rising price and time costs associated with infrastructure; and access to reliable water supplies.
There is up to five years worth of potential future land supply with the current stock of lots, the report finds.