Supply of Brisbane land lots shrinks

PUBLISHED: 05 Mar 2013 PRINT EDITION: 05 Mar 2013 Gift Article: 100

Matthew Cranston Brisbane lot production has more than halved since the financial crisis in 2007, according to the Urban Development Institute of Australia. The size of land lots has also fallen from 600 square metres to 513 sq m and prices have risen, contributing to an erosion in home affordability. UDIA Queensland vice-president Neil OConnor said buyers had been sitting on their hands waiting for better value. People are nervous about buying anything; there is a concern about jobs and interstate migration is historically low. When buyers do decide to move, they will only buy what they can afford and developers are only building things that give them a significant enough return. Mr OConnor conceded that some developers might have over-estimated price growth and may have to peg back their expectations in order to start new lot production again. During the financial crisis the median price for Brisbane land lots grew marginally from $198,750 to $219,000, leaving them only $3000 cheaper than lots in Melbourne. But Mr OConnor believes Queensland is still the most affordable eastern state and, as such, net immigration to Queensland will rebound. CBRE managing director for residential projects in Brisbane, Paul Barratt, said the lack of production in new land lots was heavily related to an unfounded lack of confidence in the local market. With the reduction in the value proposition being a combination of the size and quality of offering versus the price I think the very fact that that offering has diminished is contributing to the reduced volume of sales, or demand, Mr Barratt said. Infrastructure charges are also high on the list of reasons why land was still so unaffordable. Chairman of peak housing advocacy organisation, National Shelter, Adrian Pisarski, said a new approach to infrastructure charges, continued funding from federal and state governments and a price check from developers would all contribute to improved land affordability. There is an argument to say we need a broader approach to infrastructure charging, Mr Pisarski said. But there needs to be more work done on land release. You cant just keep releasing land on the outskirts of town it just keeps adding to day-to-day living costs. The Australian Financial Review

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