Local council planning delays add to the cost of a new home through additional land tax, council rates, holding costs and interest on loans accrued during the period.
Property consultants Urbis undertook a study for the Property council of Australia using Queensland as an example to calculate the cost to homebuyers of council delays in greenfield sites.
The study noted that in south east Queensland there are three main approaches to planning for greenfield residential land; examined the different legislated timeframes and processes that must be followed in each case, and; then costed the differences.
The three main approaches to planning greenfield developments in this area of Queensland are: Priority Development Areas (formerly urban Development Areas) administered under the Economic Development Act 2012; master Planned Areas administered by local governments through superseded provisions under the Sustainable Planning Act 2009, and; Local Government Process administered by local governments under the Sustainable Planning Act 2009.
It was found that on average UDA approval, takes less than four years, while approval under the Local Government Process takes twice as long, at an average of eight years. These timeframes are based on when the approval process started under each identified planning approach, not when planning for each development began.
By contrast, the study noted that under the ‘rezoning’ process of the metropolitan Planning Authority in melbourne construction-ready residential land to market is on the market within two years. Queensland is not, however alone, in delays of this magnitude. Similar constraints were found in other parts of Australia.
When these differences in time frames were costed the study estimated that if all approval timeframes could be shortened to reflect the average UDA approval timeframe, the average lot price could be reduced by $21,153 per lot or 8.8%. If Queensland developments could be rezoned within the same two-year timeframe in melbourne, the lot price would be reduced by $36,800 or 18.1%.
Whatever the actual numbers are in each jurisdiction, it is clear that reviewing approaches to approval processes and implementing best practice can lead to considerable savings for home buyers both initially and over the term of a loan.
See also:
NSW government planning for more terraces
Action on affordability long overdue
REIA call for action on stamp duty and affordability
Have your say about faster approval times for medium density