Brisbane’s housing development pipeline was bolstered by more than 1000 new homes in September as reforms ratchet up the process of delivering much-needed supply sooner.
According to the Brisbane City Council’s number crunchers, it was the biggest month for development approvals in the Queensland capital for more than a year and “a positive sign for the housing market”.
But given prevailing economic and construction challenges—exacerbating the mismatch between building approvals and actual supply coming out of the ground—the big question is will they all get built?
Overall, 1072 new homes were approved in September 2023, almost double the monthly average of 568 new dwellings recorded across the previous 12 months.
Of the record September approvals, two major projects made up the lion’s share—more than 80 per cent or 884 new homes—of the boost to the city’s housing pipeline.
Revised plans for a long-vacant 2222sq m site at 186 Wickham Street, Fortitude Valley, comprising 628 build-to-rent apartments have been given the green light.
The approved proposal by Brisbane-based Vita—founded by Asher Capital chairman Andrew King, TKM Capital managing director Tim Mahony and Atira Student Living founder Damian Haber—also includes ground-floor retail space and is to be delivered in two stages of 30 storeys and 24 storeys.
Aria Property Group’s proposed 30-storey cylindrical tower comprising 256 apartments in its inner-city stomping ground of South Brisbane also has been given the nod.
It is earmarked for a 1822sq m site at 10-12 Cordelia Street and will include a mix of one, two, three and four-bedroom apartments.
“Brisbane is Australia’s fastest growing capital city with another 400,000 residents expected to call our suburbs home by 2046,” Brisbane Lord Mayor Adrian Schrinner said.
“Labour and supply chain shortages have combined with our post-pandemic population growth to cause the current housing supply problems.
“With 96 per cent of all new homes delivered by the private sector, it’s clear that the only way out of this crisis is for the private sector to build us out.
“That’s why we’re bringing down housing costs by incentivising the industry to deliver new homes sooner through infrastructure charges discounts.”
The council has waived infrastructure charges and relaxed height restrictions in a bid to combat the ever-tightening housing market in Brisbane.
In August, it announced plans to lower infrastructure charges by 75 per cent on build-to-rent and build-to-sell apartments. As well, it flagged the introduction of anti-sprawl initiatives through the relaxation of height and carparking requirements in inner-city and designated areas near shopping centres.
Under its Brisbane Sustainable Growth Plan, the council has also established a dedicated build-to-rent unit to fast-track approvals.
“Reports have shown that tinkering in the market with things like rent caps and so-called tenancy reforms have driven investors out and shrunk Brisbane’s pool of rental homes,” Cr Schrinner said.
“Getting build-to-rent homes constructed is critical to fill the gap which is why we have established a dedicated approvals unit within council.”
Brisbane Civic Cabinet chair for planning and suburban renewal Adam Allan said the council was also identifying new opportunities for housing through its Suburban Renewal Precincts process.
“We’re identifying under-utilised industrial and commercial properties that can be transformed into housing and mixed-use precincts that will make our suburbs even better,” he said.
But research by property analyst Michael Matusik indicated much more will be needed.
“There are a heck of a lot of apartment and townhouse (mostly apartments) projects across south-east Queensland that are approved but have yet to start construction,” he said in a recent weekly online missive.
“As at March this year – the latest figures available – the relevant SEQ figures here are 4100 projects; 121,000 dwellings or about 16 years supply, based on demand during the 2023 fiscal year.”
Some say that this is because developers are land banking, Matusik said.
But he also pointed out there was a lot of speculation in the attached housing market “with out-of-town developers (more often than not) buying an apartment (or townhouse) site with the intent to flick the site, once it has an amassed DA, to the next sucker for a large profit”.
“Also, many attached dwellings projects just don’t work,” he said. “Their approved product mix and sizes regularly miss the mark. The buyer value proposition is often way out of whack. Their locations are also frequently poor and their housing density in cloud cuckoo land.”
Data relating to new land subdivisions across SEQ as of March 2023 showed some 59,000 lots had planning approval, of which about 28,000 or 47 per cent had operational works.
Matusik said based on last year’s demand for such housing stock—being 11,250 residential allotment registrations during financial 2023—the total approved allotments is just five years supply, and when looking at the stock with actual subdivision approval, this supply shrinks to just 2.5 years.
“Some locations, like Brisbane, the Gold Coast and Redlands have under two year’s supply of land with subdivision approval,” he said
According to Matusik, there is an “overarching current mindset that higher density living is some form of magic panacea”.
But he said while some of the new builds going forward will be in the build-to-rent space, much will be built to sell.
“On average—and when excluding the Covid-19 period—over the past five years, between a third and half of new high-rise apartments were sold to overseas interests, and many of these—roughly 40 per cent—are locked up.”
Article source: www.theurbandeveloper.com