Here’s my continued assessment of pros✅, cons❌ and questionable elements❓ for each announcement, together with a supply impact rating on a 1-5 scale (5 being highest):
4️⃣ Wednesday: Greenfields (2)
✅ Ostensibly more “certainty” about greenfield release timeframes (vs. the current VPA work plan approach) – 18k p.a. target, compared with demand being over 20k p.a. in stronger markets. Release of 2 government land sites to market for development with a further 10 to come. Planning concierge service to fix problems in getting zoned land developed (finally).
❌ Actually slows down and pushes back the PSP program reducing future supply. Sequencing of PSPs based on infrastructure, slowing down release. No new greenfield identified.
❓First “Horizon” of 10 (7 + 3 immediately announced) isn’t due for completion until end 2028. The 3 announced playing catch up with only 1 PSP approved in prior 4 years. Actually reduces future number of PSPs expected to be finalised in the coming 10 years, with some falling off list. Reannouncement of existing small sites pilot program. Impact of integration of VPA in DTP unknown.
5️⃣ Thursday: Two–Lot Subdivision (3)
✅ Looking at ways to streamline planning or create as-of-right rules for 2 lot subdisions. Remove barriers to increased townhouse supply
❌ Only incremental supply improvement – not truly scalable. Much of this product will not be “affordable” (but better than apartments like:like).
❓Not yet a change – a promise to work on some reforms to be implemented by April 2025.
6️⃣ Thursday: VBA Overhaul (2)
✅ New building watchdog – Building & Plumbing Commission. Improved access to building inspectors, insurances and dispute resolution. Attempt to increase buyer confidence in new dwelling purchases and reduce defects
❌ Increased regulation and scrutiny will push some builders and subcontractors out of market (arguably pro, but will reduce capacity). Developer bonding system and increased insurance requirements for apartments over 3 storeys will be punitive commercially, reducing industry capacity and increasing costs. Ditto increasing insurances for new class 1 dwellings.
❓Always straight to “dodgy operators” when the vast majority of the market is reputable. If new watchdog too consumer skewed it will push even more builders out of market.
🤔Follow along for part III and let me know your views on these announcements