Problems with housing situation highlighted
ACCLAIMED property analyst Michael Matusik delivered his latest report into the Toowoomba housing market on Friday, and it raised plenty of eyebrows among the development industry.
Mr Matusik’s report into the Toowoomba housing market was damning.
Speaking at the Colliers Property Outlook luncheon, Mr Matusik has concluded the Toowoomba region’s land undersupply issue is far worse now than in 2017 — when he released his previous report.
This was highlighted in Mr Matusik’s most surprising statistic (according to him): that the Toowoomba region didn’t have five years’ land supply like official sources were saying, but rather just over two years.
Here are the key findings from the property report:
1. TRC MUST FASTTRACK DEVELOPMENT
ALONG with revealing that the region had realistically just two years of subdivisional approvals in reserve (below the four year recommendation for southeast Queensland), Mr Matusik and his team could only find 418 lots actually for sale right now in Toowoomba.
This was equivalent to six months supply, with Mr Matusik concluding the council needed to act fast to increase the amount of stock.
“The Toowoomba Regional Council should be fasttracking new subdivision land applications,” the report said.
2. REGION’S HOUSING MARKET IN RECOVERY
ONE of the big takeaways from the report was that the Toowoomba region had moved out of stagnation from three years ago and was now in a recovery period.
Mr Matusik, who believed the market was about three years away from a peak, said the region would likely see an increase in sale volumes, but also a reduction in lot sizes.
“While end price growth is likely to be limited due to local affordability constraints, land prices on a rate square metre basis are set to escalate unless new supply increases,” his report said.
“Lot sizes are likely to fall further to help accommodate the higher price points per square metre.”
3. RESIDENTS PREFER DETACHED DWELLINGS
WHILE it won’t be a surprise to most people, Mr Matusik’s report highlighted just how much residents favoured living in a traditional detached home rather than in a unit or townhouse.
“The 2016 census shows that 83 per cent of the existing dwellings in Toowoomba are detached houses.
He also pointed out how few of the unit developments that were approved by the council during the mid 2010s had actually been created.
“You saw a lot of approvals around 2015-2016 and you’ve seen an increase of 100 per cent of the number of attached dwellings that have been approved but have not started," he said.
4. LACK OF NEW SUBDIVISION PROJECTS
ADDING to his conclusions about the region’s dwindling land supply, Mr Matusik revealed just 24 major housing subdivisions approved by the TRC in the 12 months to March 2020.
This is down from 68 for the same period to March 2017, a sharper decline than compared with the rest of southeast Queensland.
“There were just 139 new allotments approved for subdivision over the past 12 months,” the report said.
When looking at project sizes since March 2017, Mr Matusik found more than 85 per cent of new approvals were for projects of 10 lots or less, which made up just 23 per cent of the total number of allotments.
5. ‘ZOMBIE ESTATES’ MASK SUPPLY ISSUE
AFTER revealing the total current land supply for the region was much less than official figures (2086 as opposed to 3489), the report also discovered five subdivisions that were nonactive or “difficult” land estates.
Mr Matusik named them in the report as Gainsborough Hills Estate and Park Hill Estate in Glenvale, Essence Estate and Kooringa Valley Estate in Cotswold Hills, and Weale St in Mt Kynoch.
Describing them as “zombie estates” at the luncheon, Mr Matusik concluded that they were worth nearly 800 lots.
6. FRAGMENTATION, LOCATION ARE ISSUES
WHILE Mr Matusik revealed that there were about 315 hectares worth of future broad hectare supply over the next five years, worth about 2700 lots, he also found a number of barriers to realising that figure.
Along with existing land uses, town planning issues and soil quality, the report found land ownership fragmentation was a big problem.
Mr Matusik also said the location of broad hectare supply was also going to be a problem.
7. RENTAL PRICES EXPECTED TO KEEP RISING
WITH the official rental vacancy rate at less than one per cent, Mr Matusik’s report concluded that rental prices were likely to keep going up.
“Median weekly rents have increased sharply over the past (two) years,” he wrote.