2015 UDIA state of the land report

Providing enough new serviced land in our cities and towns is the key to successfully accommodating our growing population, and is a major challenge for policy makers at all levels of government. This is the seventh edition of the annual State of the Land Report prepared by the Urban Development Institute of Australia. Unlike in previous years, this years’ report has been undertaken in partnership with Charter Keck Cramer and Research4, which have provided land supply and market performance data from the National Land Survey Program (further details in the last section of this report). This ground breaking partnership allows data sourced from developers on the ground across the country to bring a new level of reliability, consistency and depth to the Report. The modest upswing in development industry activity that we saw emerging in 2013 continued to gather momentum throughout last year, and as a result, 2014 was a strong year for industry, and for new land supply. Nationally, the NLSP data sample indicates that 50,150 new greenfield lots were released over the 2014 calendar year, up 31% from 38,350 in 2013, and the highest level of new releases since the global financial crisis. Despite low interest rates and strong market demand, at the national level, new lot prices have remained largely in check across most cities, with the notable exceptions of Sydney and Perth. As noted in previous years’ State of the Land Reports, median lot sizes across most cities have continued their downward march, a reflection of changing market preferences, land constraints, and affordability pressures. 2015 is currently shaping up to be another good year for the development industry and for new land supply, with continued strong demand and high levels of market activity, with the exception of South Australia. However despite recent improvements, most cities across Australia still face major constraints when it comes to new land supply. Governments cannot afford to be complacent. They must undertake the necessary actions to improve planning systems, increase infrastructure investment, and reduce red tape, to ensure the availability of sufficient serviced land to deliver affordable housing, and to support jobs and economic activity in the development industry

The link between infrastructure charges and housing affordability in Australia: where is the empirical evidence?

Developer paid charges or contributions are a commonly used infrastructure funding mechanism for local governments. However, developers claim that these costs are merely passed on to home buyers, with adverse effects to housing affordability. Despite a plethora of government reports and industry advocacy, there remains no empirical evidence in Australia to confirm or quantify this passing on effect to home buyers and hence no data for which governments to base policy decision upon. This paper examines the question of who really pays for urban infrastructure and the impact of infrastructure charges on housing affordability. It presents the findings of a number of international empirical studies that provide evidence that infrastructure charges do increase house prices. Based on international findings, and in the absence of any Australian research, then these findings suggest that if the international findings are transferable, then there is empirical evidence to support the proposition that developer paid infrastructure charges are a significant contributor to increasing house prices