A SERIOUS shortage of new residential subdivisions could see the Gold Coast ‘land locked’ within eight years, according to research by Oliver Hume.
And to highlight the problem, the real estate group has revealed that there were only 221 lots of vacant land for sale in the city at the end of December.
Oliver Hume calculates there is 1900ha of land zoned for development on the Coast, which could bring about 20,000 housing lots onto the market.
However, after stripping out those sites that are too steep for development, the number is slashed to 13,000 lots.
“With a 15-year average of 1720 lots sold on the Gold Coast per annum, we are looking at the situation where the entire city will be completely out of land available for housing in about 7.5 years,” says Brinton Keath, the joint-managing director of Oliver Hume Queensland.
“Australia’s sixth-largest city will be essentially land locked because it has completely run out of developable land.”
Keath says the problem could be exacerbated by another property boom, the type last seen in 2003 when 3256 lots sold in the Gold Coast region. Property prices that year went through the roof due to supply pressures.
“The market is heating up, and there is no reason that this level of sales may not occur in the next year or two,” says Keath. “If this happens, the 7.5 years turns in to less than five years overnight.”
Keath says supply constraints are already making the Gold Coast unaffordable for buyers, particularly young families, with the average price for houses hitting $500,000 in November for the first time and rising to $520,000 in December.
Oliver Hume’s research comes on the heels of the City of Gold Coast announcing a review of restrictions to developing large tracts of rural cane land in the bustling Brisbane-Gold Coast corridor.
The study, part of the 2015 City Plan which will be implemented from the beginning of next month, could open up more than 3000ha of low-yielding caneland to development.
The green zone south of the Logan River comprises 17,000ha, with about 11,000ha of that devoted to cane farming.
Cane farmers have been lobbying for change for years due to poor returns and an ageing farmer demographic. The latest harvest at the region’s ageing Rocky Point also was cut short due to operational issues, adding to the woes of the local industry.
Pressure to release large parts of the green belt for development, including the extension of the Yatala industrial estate, is expected to grow as the development boom currently under way in Coomera and Pimpama to the south of the cane fields gathers momentum.
However, Gold Coast Mayor Tom Tate says the council has identified a total of 18 investigation areas, largely infill sites, that could ease supply shortages.
“The Gold Coast needs around 130,000 new dwellings and 150,000 new jobs to support population growth over the next 20 years,” Tate says.
“Because the Gold Coast’s urban areas will not significantly expand, the majority of these dwellings will occur as infill development within the city’s urban areas.
“Of these areas, around two-thirds are planned to be accommodated in renewed and transformed centres and key inner-city urban neighbourhoods, with the remaining one-third planned for new communities and in the Coomera Town Centre area where supplies of undeveloped land in the urban area still exist.
“Council is also currently undertaking an Urban Neighbourhoods and Transit Corridors Planning Investigation which is looking at future growth opportunities along potential light rail corridors and medium and high residential zoned land within 1km of our centres; as identified in the new City Plan.”
The latest residential building approvals confirm that Queensland is maintaining heady growth despite a pullback in the national figures. The state’s south-east corner is particularly strong.
Queensland building approvals in November surged to 4051 dwellings from 3702 in the previous month, seasonally adjusted. Nationally, approvals fell 12.7 per cent with Tasmania, Queensland and NSW propping up the average.
Oliver Hume calculates there were 1403 lots under production on the Gold Coast at the end of 2015, search showed that as at December 2015.
While this is below the annual average for the city, Keath says the dwindling pool for future subdivisions will create a critical situation within five years.
He says a decision on caneland could be years away, if ever, highlighting the inevitability of significant price increases for existing properties.
“With less and less land coming onto the market, prices are going to go through the roof,” he says.
“If we continue to produce 1,400 per annum for the next 5 years, the 13,000 lots will be reduced to nothing in less than 5 years and the city will be completely land locked.”
Written by: Nick Nichols, 8 January, 2016.
Source: Business News Australia