Toowoomba Land Supply

We were recently commissioned to undertake a detailed investigation into the residential land supply situation in Toowoomba.

We have undertaken several such studies in recent years across many parts of urban Australia and our Toowoomba work this year follows up on a similar document written, and presented, in Toowoomba in late 2017.

Our 2017 document concluded that “the Toowoomba housing market experienced a hard downturn in 2011.  Up until a year or two ago, the market was recovering strongly.  Since late 2015, sales volumes have fallen, yet in most instances, prices continue to rise.  This is especially the case when it comes to vacant land.  A shortage of new development approvals; and in particular for new land estates; is already starting to bite.”

Fast forward to today and our work illustrates that the Toowoomba land market remains undersupplied and despite recent turbulent economic times – bushfires and COVID19 – the Toowoomba land market is in the recovery phase of the property cycle.

In fact, the extent of the undersupply is worse than it was in late 2017.

Yet land sales volumes are again starting to rise, as are land prices.

In addition, the HomeBuilder government package has lifted buyer interest and post COVID19 the appeal of large, well-serviced regional towns and cities such as Toowoomba, within easy travelling distance of a capital city, is likely to grow.

The established housing market, as a result, is also set to improve.

Yet the region faces several challenges including keeping its younger residents and importantly attracting new young people to work and live in the region.

One of the key factors influencing a younger market is affordable housing and appropriate local work.  Toowoomba does not have enough subdivisional land. 

This lack is negatively affecting housing affordability. 

A lack of new development, in turn, adversely impacts on local jobs.

The construction industry accounts for 16% or 2,565 of Toowoomba’s 16,100 local registered businesses.  The construction industry in Toowoomba also employs 13,350 people on a full-time basis or 18% of Toowoomba’s 73,750 full time employees.

Full time local construction employment has fallen by 870 jobs, or by 6%, over the last two years.

Moreover, the local construction industry is worth $14,350 per annum to every Toowoomba resident or $36,000 to each Toowoomba household.  It is an important economic driver and one which adversely affects the local commerce when new housing starts (and land sales) decline.

In fiscal 2019, construction accounted for 23% of the Toowoomba economy.

In addition, the rental market is also now very tight, and more investment stock is needed.

About 170,000 people live in Toowoomba.  It has been growing, and is expected to continue to grow, by some 1,650 new residents per annum.

Our work suggests that there is need to build 600 and 625 new detached houses in Toowoomba each year.  These new detached houses will each require a new residential allotment. 

Using this annual housing demand as our base, the state of new subdivision land supply in the Toowoomba Regional Council area is as follows:

  • Based on current Queensland government estimates there are 3,489 allotments approved but not yet developed. This equates 5.5 years supply.
  • Yet our ground truthing analysis of this government estimate found 2,083 allotments remaining to be sealed across 24 land estates. This equates to 3.3 years supply.
  • However, five of these land estates, holding some 783 undeveloped allotments, are ‘difficult’ and when excluded – as they should be – from the count, the approved supply drops to 1,303 allotments equating to two (2) years supply.
  • The true test of land supply is what is available ‘for sale’. Our survey found just 418 allotments for sale in Toowoomba.  This equates to six (6) months’ supply.
  • Looking forward, the Queensland government states that within the next five (5) years some 2,700 additional allotments could be added to the Toowoomba land supply. Please note that this potential count does not factor in a range of pragmatic constraints that negatively affects land supply.  Assuming all 2,700 additional allotments can be supplied this equates to just 4.3 years supply.

In summary, Toowoomba has just two (2) two years of subdivisional approvals which is below the four (4) years minimum SEQ Growth Monitoring recommendations and the area has less that 6 months’ supply for sale.

In addition, Toowoomba doesn’t have enough broad hectare land available for future residential development over the next five years.

The Toowoomba Regional Council should be fast tracking new subdivision development applications.  They also should be considering expanding their residential zoning to correspond to help facilitate more residential development. 

Both tasks need to be done with haste.

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