Images of "enormous" homes on small blocks with no vegetation?
Yes, average lot sizes for new homes have shrunk dramatically over the past three decades – by almost half – meaning homes will be built closer to each other.
But what is behind land "shrinkflation"? There are many contributing factors.
1. Policy Greenfield release plans like Victorian Planning Authority PSPs or release areas in QLD or NSW are subject to minimum density targets. These have grown steadily over the years, starting at 10 dwellings per hectare, then 15, and now targeting 20 or 25/ha or more. By definition, lots must get smaller to meet targets and maximise the use of urban land.
2. Taxes & Charges Taxes and charges have grown exponentially. Contributions to local or state infrastructure, GST, land taxes, authorities now make up a bulk of the development cost of new land.
In NSW, contributions can be as much or more than the cost of physical works.
To put things into context, Development Contributions paid to produce a new land lot today are more than a completed block double the size would have sold for in the 1990s!
3. Supply Government Policy has consistently reduced the pace of new land release areas, leading to less competition and increasing end prices in those few places where supply exists.
🤔Does anyone see there pattern of interference here..?
4. Affordability Smaller lots feeds back into affordability. Except for projects which target the top-end, most land developers aim to deliver the best value we can which meets the affordability constraints for more people.
Coupled with ever increasing external infrastructure costs, more homes are required to amortise the imposts.
It's easy to criticise developers, but we can only work within the system we have, including prevailing planning and cost isues.
New developments, and the trees/vegetation within them, take time to establish. A photo of recently completed stages won't show them in a great light.
The desire for more street trees and planting is usually stymied by Councils or service authorities which prioritise low maintenance.
Land projects usually have a much larger proportion of public open space nearby to offset the smaller lots.
Plus the homes look bigger than they are due to the inclusion of eaves and overhangs – necessary to reduce solar heat gain and improve energy efficiency.
So before one-dimensionally criticising the outcome, land/townhome development is far more attainable, and desirable to more new home buyers than high-density options being favoured by policy makers.