08/04/2010 - 00:00

Land supply estimate cut in half

08/04/2010 - 00:00

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THE Western Australian Planning Commission has halved its estimate of the number of lots available for housing in Perth, as property industry leaders warn the state is not prepared for another surge in housing construction.

Land supply estimate cut in half

THE Western Australian Planning Commission has halved its estimate of the number of lots available for housing in Perth, as property industry leaders warn the state is not prepared for another surge in housing construction.

WAPC chairman Gary Prattley said the number of lots realistically available for housing development was about 35,000.

The state government has previously estimated there are 74,000 lots available for development statewide.

“We have done a lot of work analysing that stock and what’s been held up by environmental conditions, and in the revised Directions 2031 we have discounted those numbers fairly heavily,” Mr Prattley told a WA Business News boardroom forum last week, referring to the commission’s planning framework released in June 2009.

“But we still believe there are 35,000 developable lots.”

According to Mr Prattley, the critical issue for the short-term supply of developable land is the finance industry’s capacity or willingness to lend.

He emphasised that the WAPC was doing everything possible to get land that could be developed for housing into the system.

Mr Prattley was responding to comments from Saracen Properties managing director Luke Saraceni, who told the forum WA was entering another property boom with an undersupply of developable land.

“If people thought the last boom, where people were lining up at housing estates, was a thing of the past they’ve got another thing coming, because we are going to have such a shortage of supply,” Mr Saraceni said.

“We’re coming out of this recession with an inherent undersupply in a lot of areas.

“We actually went into the last boom with a slight equilibrium or slight oversupply.

“We’re starting a property boom behind, so what’s going to happen when the resources boom hits properly?”

Mr Saraceni said the 74,000 lots estimate was incorrect, because many lots had approval from the planning commission but were held up gaining environmental and other approvals.

“As a town planner and as a developer I can tell you what the problem is with those lots,” Mr Saraceni said.

“Of the 74,000, there are probably groups of them that have been approved by one developer for 500 lots at a time, 600 lots at a time but none of which will be developed at once; they’ll only develop 100 lots at a time.

“The second most important point with our system is ... with the conditions on the approvals, a lot of those won’t be approvals, they’ll be pseudo approvals, but you can’t implement those particular approvals.

“Unless we start to address this situation of allowing the supply chain to flow, the tipping point is going to be headlines in the paper where everybody recognises their sons and daughters and their grandchildren cannot afford a simple house.”

Hames Sharley principal Bill Hames shared Mr Saraceni’s concerns with roadblocks in the supply process and an impending property boom, saying 74,000 lots was just three years’ supply for normal Perth conditions, and would not be sufficient for a property boom.

“If this is a property tsunami, then 74,000 will be gobbled up quicker than three years,” Mr Hames said.

“I looked at a project the other day, just a mere 700 lots to be created, all services are running around it now, and the estimated time to get the approvals through is six years.

“So if that’s just an example you’re going to run out of your 74,000 very rapidly.”

• A full report on the boardroom forum will appear in next week’s WA Business News.

 

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