Planning delays costing new homebuyers in Queensland: PCA
Planning delays are costing Queenslanders an additional $36,800 on the price of a new home, according to new research from the Property Council of Australia.
At the same time, the cost per square metre of new greenfield land has gone up even though the lot sizes have shrunk.
The study by Urbis, on behalf of the Property Council, calculates the cost for homebuyers due to delays in the assessing greenfield sites in Queensland.
“Assessment delays have a significant impact on housing affordability,” Property Council Queensland executive director Chris Mountford said.
“For every month that a project is held-up, the developer has to pay more land tax, more council rates, more holding costs and more interest on their loans – adding thousands to the end product.”
“For each year of approval delay the cost per residential lot increases by $6,450.”
If a Queensland development is fast-tracked by the state government it is likely to take nearly four years to achieve approval. Left to a local government process, the approval would usually take twice as long, according to the study.
“The research shows that if Queensland developments could be rezoned within the same two-year timeframe that we see in Melbourne, the lot price would be reduced by $36,800,” Mountford said.
“Even if we could improve our local government approval processes to be as quick as the State Government processes, we could achieve a saving of $21,153 per lot.”
On a 30-year mortgage, this translates to about $40,000 savings.
“That’s a real saving for homebuyers and an efficiency gain for the Queensland economy."
Put together, planning delays across Queensland for residential lot sales could be more than $300 million per annum, said Mountford.
Even the proportion of lot sizes and costs have risen. From 2009 to 2015, the average lot size in South East Queensland reduced from 591 sqm to 515 sqm. Meanwhile, the price of an average lot in the same period has gone up to $236,000 from $227,000.
“With sizes decreasing and prices increasing over the last six years we have effectively seen a 27 percent increase in the cost of greenfield lots,” Mountford said.
The report suggests the Queensland government review approaches to greenfield approval and tackle planning delays.
“It is vitally important that the state government’s ongoing South East Queensland Regional Plan review results in a new plan that gets the settings right to facilitate the speedy delivery of greenfield land.”