Decisions and actions which are needed to ensure that Australia has an adequate supply of residential land to meet long-term housing requirements are being hampered by a lack of data regarding the amount of land which is at important stages within the land release process, a review of available data has found.

(above image source: Google Maps)

As part of its HIA-CoreLogic Residential Land Report which it published last week in conjunction with CoreLogic, Housing Industry Association has conducted a desktop review of published data which is available in each state and territory across all seven stages of the land development process (see below).

The review found that substantial improvements have been made since an earlier review was conducted five years ago in 2018.

However, it also found that serious gaps remain in data availability across several stages of the land development supply chain.

As a result, there is no guarantee that sufficient land will be available to meet long-term housing requirements.

“Timely and comprehensive data across all stages will not only allow future projections to be more robust, but it will also allow any bottlenecks in the supply chain to be identified and rectified quickly without impeding the efficient flow of the market … “ HIA said in the aforementioned report.

“… despite these improvements (see below), there’s still considerable room for improvement before a true picture of the land supply pipeline (is able) to be established.

“Without that picture, governments and planning authorities are essentially flying blind when they make projections of future home builds.

“How can anyone know for sure the capacity for future building if we don’t have a reliable picture of land availability across each of the seven stages of land release?”

Fig 1. The Seven Stage Process of Land Release

(source: HIA CoreLogic Residential Land Report, March quarter 2023)

The analysis comes as the aforementioned report indicates that shortages of vacant residential land persist across Australia despite a slowdown in detached home building activity.

According to the report, the number of vacant residential lots which have been sold have remained flat for the past three quarters at levels which are below those seen at any other time in at least the past five years.

However, the price of vacant residential lots has in fact continued to edge higher – albeit with the rate of price escalation having moderated and much of the escalation being attributable to a modest increase in median lot sizes.

This has raised concern that rising interest rates and the subsequent impact upon new housing demand may be obscuring an underlying shortage of land that will lead to further price escalation once demand returns to normalised levels.

As part of the work for its report, HIA conducted a desktop review of data which is publicly available throughout all states and territories across the seven stages of land development.

As shown below, these stages include: designation and zoning of land for development; approvals for planning, works, and completion; title registration and the sale of land to the market.

According to HIA, the ‘gold standard’ would be a situation where it was possible to trace the number of lots which are at each stage of the land release process across all states and territories.

This would include provision of data across all local government areas (LGAs) within the states.

It would also involve a nationally consistent approach to reporting requirements across each jurisdiction.

In its report, HIA noted that improvements in data availability were evident across several areas compared with its previous audit which was conducted five years ago in 2018.

In particular:

• All jurisdictions except WA and the NT now provide ongoing data on the number of lots sold to market – so called ‘shovel ready’ blocks. And although WA does not provide data showing the number of lots sold, it does provide regular data on stage 6 – lots receiving final approval. This means that an estimate for the number of sales is able to be derived.
• The currency of data has generally improved, with most jurisdictions providing data up to late 2021 or early 2022. Assuming a five-year average time delay from start to finish, this means land release data from 2022 could potentially be used to inform planning decisions up to 2027.
• At least for major urban areas, data publication is now sufficient to derive a rough picture of the start and finish of the land supply process. While any such estimate would necessarily be back of the envelope, it is a vast improvement over the situation when HIA’s previous analysis was performed five years ago.

Furthermore, the analysis found that in some states, data provision is reasonably comprehensive.

In the Australian Capital Territory, comprehensive data is provided across the land development pipeline – although formatting issues provide some challenges in making this data accessible.

In Queensland, meanwhile, quarterly data covering the twenty years up until the March quarter is available across each of the above stages except for the zoning stage (stage 2).

That said, the Queensland data covers only around half of the state’s local government areas.

In other states, however, significant data gaps persist.

For example:

• In New Soutth Wales, early-stage data is only available for Sydney and Newcastle, with no specific greenfield data available at a regional level. A reasonably detailed time series is available for each of the three broad stages – planning, approvals and sales. However the data are not downloadable into a single spreadsheet – a phenomenon which limits the potential for analysis.
• In Victoria, provision of data is sporadic only. Available data covers only the early and later stages of development does not cover the entire state. Time series data are only available for Melbourne, with the rest of the state covered only fleetingly as and when individual areas become covered by an urban development program.
• Data in Western Australia is confined to the later stages of the land development process. Even then, the data sets are not provided in a manner that facilitates easy analysis.
• Early-stage data for South Australia is only available in PDF format, and regional areas only have data up to 2019. This means data provided is virtually worthless in terms of performing meaningful analysis.
• Tasmania provides monthly data only on lots of land released to market (stage 7) from January 2021. No data is provided on any stage before that. It is hoped that a housing strategy currently under preparation may hopefully generate more information on land releases.
• The Northern Territory lists individual lots that are for sale online but does not provide any summarised or aggregated information on the amount of land at any stage of the land release process.

Going forward, HIA argues that a nationally consistent reporting framework is needed covering each stage of the land development process.

This should be adopted by all states and territories and should include adequate definitions of each stage of the process.

The latter point is important as currently, differing terminology which is used across varying jurisdictions impedes the ability to undertake meaningful analysis or cross-jurisdictional comparisons.

To ensure that the framework is followed, HIA says that governments should allow for private sector certification in the early stages of the land supply pipeline.

In a similar way as certified auditors are authorised to ensure that financial reports are in line with financial reporting standards, HIA says that certified land surveyors should be authorised to ensure that the availability and reporting of land availability data at a council level is consistent with national guidelines.

In its report, HIA says the importance of nationally consistent data regarding land supply should not be underestimated.

“Although it is commendable that states are at least providing some information – and certainly more than in 2018 – the information they do provide is still nowhere near enough to use in any form of meaningful analysis …,” the report read.

“… One of the main challenges is different terminology used by different states which makes it very difficult to accurately compare different stages.

“Why does this matter?

“State Governments will make better decisions if they’re able to compare their own land supply information against other states. National planners from the likes of Treasury and NHFIC clearly need nationally consistent data to better do their jobs. And private investors looking to invest somewhere in Australia, but not sure exactly where, would obviously benefit from a nationally consistent database of land supply.”

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