Queensland’s land and housing supply is getting increasingly tight with developers barely able to keep up with demand and the result is skyrocketing house prices.
According to the Queensland Government’s Shaping SEQ report, Southeast Queensland is expected to be home to nearly two million additional people by 2041, requiring approximately 800,000 new dwellings to accommodate the growth.
AVID Property Group (AVID) General Manager Queensland Bruce Harper said a looming shortfall of new land meant governments and communities would be facing pressure from every direction.
“Having an adequate supply of land zoned and matching this with planned delivery of infrastructure including water, sewer and electrical services in line with demand is a complex and difficult task but it is vital to ensure that housing remains affordable,” Mr Harper said.
“There are a lot of planned growth areas that have constraints such as flooding, protected vegetation or koala habitat that deems it unsuitable or unavailable for development.
“While some growth suburbs may have adequate supply, others have very limited supply. The last year’s record growth in demand for new homes has further exacerbated the supply shortage especially in some of the more popular growth corridors such as the Gold and Sunshine Coast.
“We’re in for a strong ride for the next couple of years. Land prices, particularly in those supply constrained growth corridors, will skyrocket.”
AVID has 12 active house and land communities across Queensland, which have seen an 55 per cent increase in sales over the past 12 months, with four reaching complete sell-out.
“This situation is not just affecting AVID. All land developers have practically doubled production over the last 12 months, “Mr Harper said.
“Queensland is a hot market. We are only looking at increasing demand with southerners migrating north and cashed-up ex-pats returning from overseas. Many of these people are wanting to make Queensland home no matter the cost.
“On top of that, residential rental vacancy rates are extremely slim and markets such as the Gold and Sunshine Coasts are at record low levels.
“That’s also driving investors back into the market accelerating demand and competition which inevitably pushes up prices.”
The Real Estate Institute of Queensland shows Queensland’s vacancy rates are at their lowest since 2012, with rates sitting at below one per cent across more than 70 per cent of the state.
“Accelerated demand is soaking up all the supply that was in the system, and there is a huge need for the Government and Councils to unlock more large parcels of land through appropriate zoning and site amalgamation,” Mr Harper said.
AVID’s flagship project on the Sunshine Coast, Harmony, recently released a stage of land, and within an hour 40 groups set up camp outside the sales office to be first in the door the next morning.
“We have a growing database of people anxious and willing to buy today but are faced with a limited number of blocks available over the next few months.”
“We are trying to get more blocks out to market, but the challenge is in obtaining Council’s approvals to meet this demand.”
AVID’s building arm Villaworld Homes has consistently built homes six months ahead of demand, but since HomeBuilder was introduced in mid-2020 the company is working six months behind sales in a push to keep up with buyers.
AVID General Manager of Housing and Queensland President of Housing Industry Association Peter Wood said it was hard for developers and builders to take advantage of boom conditions if town planning didn’t allow for developers to deliver a variety of housing and rationalisation of product.
“It’s a catch-up game for the industry. We’ve always sold homes that are complete, or close to complete, which buyers were able to walk through and see for themselves. We now purely sell off the plan, but buyers are very happy to wait for a home that ticks all the boxes,” Mr Wood said.
“Added to the land supply issue is supply chain disruptions and labour shortages caused by the spike in demand.
“COVID-19 has of course impacted the ability to import materials as quickly as what was previously possible, however it is also the impact of the 2020 fires in Australia that are now manifesting and seeing price hikes on timber and things such as diverting building resources to deal with repairing homes damaged by the storms several months ago.”
Mr Wood said conditions would continue to be challenging for the building industry, and believed the issue was yet to peak.
“We can expect supply issues to worsen towards the end of the year,” he said.
“There are legitimate delays in the system, stemming from a range of issues, which is slowing down the process at all levels, and ultimately having the biggest impact on those who are desperately trying to get into the market.
“There has been a lot of positivity across the residential market, but there needs to be a serious conversation between the industry and Government as to what is being done to accommodate the growing demand and to ensure housing in Queensland continues to be an attainable goal for buyers.”