Inefficient planning processes and delays in assessing greenfield sites in Queensland are costing home buyers up to $36,800 and adding up to six years in delays when it comes to delivering new housing, a new analysis has shown.
Prepared by planning consultancy Urbis on behalf of the Queensland division of the Property Council of Australia, an analysis of publicly available data has attempted to put dollar figures on the cost of what the Council feels are inefficient processes for decision making and assessment with regard to greenfield areas.
It notes that whereas approval decision processes generally take around two years in Melbourne, those in South East Queensland take on average between 3.9 and 8.0 years depending upon the type of planning scheme used – a delay of between 1.9 and 6.0 years compared with what typically would have been the case within Melbourne.
Given estimates from Urbis that each year of delay adds around $6,450 to the cost of the average lot of vacant land (due to land taxes, council rates and developer holding costs), it says the effect of these delays can add anything from between $10,253 to $36,779 to the average cost of a plot of land – costs which are either absorbed into developer profit margins or passed onto consumers.
Were all costs to be absorbed rather than passed on, Urbis estimates that the delays over and above the two year timeframe amount to between $7.7 million in the case of a Priority Development Area PDA to $27.6 million in the case of areas in which development assessment processes in greenfield sites are largely conducted by the local councils.
Throughout Queensland, approval processes with regard to Greenfield sites fall under three broad categories.
Whilst the traditional style of greenfield planning approval processes take place through local government processes (LGP) under state planning legislation, an accelerated and largely state led approach applies to designated areas known as priority development areas (PDAs) which are considered to be critical from the point of view of promoting economic development.
A third category which involves greenfield sites transitioning from non-urban to urban land and detailed to facilitate desired regional outcomes revolves around what are known as master plan areas (MPAs).
In its study, Urbis looked at seven development areas. Whilst four of these were MPA areas (Park Ridge in Logan, Commera on the Gold Coast, Kinross Road in Redland, and Caboolture West in Moreton Bay), two were PDAs (Yarrabilba in Logan and Caloundra South on the Sunshine Coast) and one (Rochedale) was an LGP area.
In its research Urbis found that average times taken to get gain approval came to 3.9 years in the case of PDAs, 5.8 years in the case of MPAs and 8.0 years in the case of the one LGP area in Rochedale.
Of course, it should be acknowledged the limited number of sites looked at means that the analysis does not represent any form of detailed quantitative research project.
The latest analysis comes as planning throughout Queensland is actually shifting back in the direction of local government assessment.
Changes to the state’s planning system which passed through Parliament earlier this year largely shift the emphasis back toward local council involvement in assessment decision making processes – a move which the latest analysis suggests would lengthen greenfield planning decision making times.
Property Council of Australia (Queensland division) chief executive officer Chris Mountford says costs associated with delays cannot be overstated.
“Assessment delays have a significant impact on housing affordability,” Mountford said.
“For every month that a project is held-up, the developer has to pay more land tax, more council rates, more holding costs and more interest on their loans – adding thousands to the end product.”