According to a recent survey by The Committee for Brisbane some 88% of its members are in favour of a Brisbane/SEQ Olympic bid for the 2032 Games.

Most (91%) see improved and delivered transit infrastructure as a major outcome of housing the Games. In addition, many see an increased brand awareness of the region as another major benefit.

For more go here:  June 2019 Members Survey

Yet, like every other urban region that has invested heavily in hosting a major sporting event or its equivalent over the last couple of decades, this event will most certainly lose money.  Probably a lot of money and much more money than most realise.

And they almost never bring in a lasting legacy as often spruiked neither.

Despite volumes of documented evidence to the contrary, why do well-intentioned people and organisations, like The Committee for Brisbane, spearhead new projects like this?

So why does it keep happening?

According to Seth Godin there’s a valuable set of lessons here about human behaviour:

  1. Powerful people will benefit. High profile projects attract vendors, businesses and politicians that seek high profile outcomes. And these folks often have experience doing this, which means that they’re better at pulling levers that lead to forward motion, just like this Brisbane Committee survey.
  1. The project is specific. Are there other ways that Brisbane/SEQ could effectively invested the money? Could the region have improved access, improved education, invested in technology or primed the local job market? Without a doubt. But there’s an infinite number of alternatives – with numerous agendas and many vested interests – versus just one specific goal.
  1. The project has a rigid timeframe. It’s imminent. You can’t study it for years or a decade and come back to it. You are either in or out. It’s yes or no.
  1. The end is in sight. When you build a stadium, you get a stadium. When you host the Games, you get the Olympics. That’s rarely true for the more important (but less visually urgent) alternatives, such as actually making the city better.
  1. Patriotism’s at work. “What do you mean you don’t support the city?”

The big takeaway here is to understand that an economic argument as to why this pitch – and the possible hosting of the Games – shouldn’t happen is a waste of time.

It won’t change the decision maker’s minds.  It will get no purchase with the masses.  The media might run a few stories about the counterpoint but only really to be seen as offering a balanced view.

But we can learn a lot as to why such campaigns get traction.


I wish I had a buck for every time someone of late spruiked south east Queensland’s pending real estate boom.

The usual misinformed drill is in play – improving net migration to Queensland and the proposed big government spend on SEQ infrastructure projects means more jobs and rapid property price growth.

Hmmmm, the five charts in this post suggest that there isn’t any boom coming soon.  Well not until there is a lot more full-time work in Queensland plus private business activity and investment improves.

Right now Queensland seems to be importing more economic refugees than entrepreneurs.

In addition, state and local government spending is the only main driver behind the Queensland economy, all of which is being funded by high levels of debt.

Making matters worse is that there is more red tape than you can poke a stick at; project indecision and unnecessary plus expensive compliance.

The word Queensland used to be followed by an exclamation mark.

These days Queensland? seems more apt.

The Big Three

This post I look at the projected increase in the number of households in Australia.

I have included two tables.

Table 1:  Summary

Location Total households Annual increase % share of total increase % increase in city size
2019 2029
Australia 9,648,665 11,205,601 155,694 100% 16%
Capitals 6,335,403 7,533,768 119,837 78% 19%
Regions 3,313,262 3,671,833 35,857 22% 11%
Capitals* 7,563,377 8,908,223 134,485 86% 18%
Regions** 2,085,288 2,297,378 21,209 14% 11%
Matusik + ABS.  Medium series. Capitals* includes Sydney Metropolis + SE Qld.  Regions ** excludes Sydney Metropolis + SE Qld.

Table 2:  Capital Cities

Location Total households Annual increase % share of total increase % increase in city size
2019 2029
Sydney 1,903,729 2,255,868 35,214 23% 18%
Melbourne 1,876,876 2,312,668 43,579 28% 23%
Brisbane 902,042 1,083,512 18,147 12% 20%
Perth 789,870 920,902 13,103 8% 17%
Adelaide 546,839 595,357 4,852 3% 9%
Canberra 167,040 197,557 3,052 2% 18%
Hobart 97,986 109,568 1,158 1% 12%
Darwin 51,021 58,336 732 0% 14%
Sydney metropolis* 2,470,741 2,875,538 40,480 26% 16%
SEQld** 1,563,004 1,838,297 27,529 18% 18%
Matusik + ABS.  Medium series. Sydney metropolis* includes Newcastle + Wollongong.  SEQld** includes Gold Coast, Sunshine Coast and west to Toowoomba.

Key points

The forecast is that we will see the creation of an additional 1.56 million households (or 156,000 new households per annum) over the next decade.  Over 85% of this growth – when you factor in the wider Sydney area and SEQld – will be in, or adjacent to, our eight major capital cities.  See table 1.

Narrowing this down a bit further, some 80% of the growth is expected to take place in four urban areas – Melbourne, the Sydney metropolis, SEQld and Perth. These four urban areas are expected to increase by 1.247 million households over the next decade.  See table 2.

If this happens the number of households in this combined area will increase by 20% from today’s total.  That’s one additional household for every five existing homes in the space of just ten years. At this rate these four urban areas will double in size within the next 40 years.

Regional Australia is expected to increase but not by anywhere near as much. When excluding Newcastle, Wollongong, Gold Coast, Sunshine Coast and Toowoomba from this count, the resultant 210,000 projected increase over the next decade equates to just a 11% lift in the existing regional Australian household count.  Revisit table 1.


Not surprisingly, talk has now turned to moving new overseas migrants to the regions and spending even more money on major transport infrastructure projects in our major capitals.

For mine this is a waste of money and time.

We will not be able to encourage people live where they don’t want to live; let alone enforce it.

The big-ticket transport projects that get approved really don’t solve much – apart from giving the pollies a tool to campaign with and a photo op at the ribbon cutting somewhere later down the line.

They are almost always delivered later and at far greater expense than originally forecast.  Plus, their economic benefit is dubious at best and more often than not they actually add to the problem rather than make things better.

Our cities are going to get bigger.  We shouldn’t waste our time trying to stop this.  We should be making our cities better.  And that must start with a plan.  

It would be best if that plan was universal – well Australian wide at least – and frankly I think it is very simple.

The plan involves just three things:

  1. Getting people to travel less.
  2. Getting people to travel at different times.
  3. Getting people to travel in different directions.

That’s it.

This should be easy.

The market is already supporting this strategy.  In fact across most spheres, business is actually pushing this agenda.

Politics, bureaucrats, regulations, vested interest groups and the 24-hour media cycle are – pardon the pun – the road blocks.

If we implement these three things, we can improve our cities and save many billions of dollars each year in wasted infrastructure spending and incidental costs caused by traffic congestion and unnecessary business expenses.

My 10 things future housing list

It was all doom and gloom in the lead up to the federal election and now, apparently, the housing market is set to improve, with some predicting another boom.


For mine nothing has really changed as the Australian housing market still faces the same range of issues.

10 Things Future Housing List

I like to number things, so here is my 10 things Future Housing list:

  1. Limited wage growth regardless of what the government says or the RBA does.
  2. The rise of ‘The Algorithm’, better tech and a move towards automation and robotics will also see rising under-unemployment and less full-time work.
  3. Most new jobs will be in service industries.  Much of this work will service the local community, be part-time and also be low paying gigs.
  4. Low inflation is here to stay and disinflation is on the rise.  Disinflation is when a Kit Kat is still $1 but is now 45g instead of 55g.  Meanwhile, the cost of utilities, insurance and compliance are increasing and sharply.
  5. ‘Starting out’ (young renters + first home buyers) and ‘downsizers’ are the two major housing demand cohorts.
  6. More of us will cluster together – living/working in select urban locales – there are strong economic reasons behind this trend.
  7. Most new overseas migrants live in large family groups and are used to, even prefer, multi-generational housing.
  8. Housing affordability, is and will remain, low for most of the community.
  9. Limited generic capital gains and overall rental growth for the next five years, maybe longer.
  10. Investors will need to manufacture growth and positive rental yields will drive most investment decisions.

In summary, two incomes per household won’t cut it anymore.

Households will either move to a cheaper location or stay in the same area, but buy or rent a more compact dwelling.

Many, if not most, I believe will take in an extra person/s to help them make ends meet.  This applies to both owner occupied housing and also investments.

How many hold an investment property?

There is a lot of noise being bantered about regarding property investment of late.

No surprises here given the pending federal election; the likelihood of a close result and the mooted investment property changes by the Labor Party.

I don’t want to join the noise, but when I read or hear gibberish I always like to go back to the numbers.

So just how many Australian households hold an investment property?  And who are these cats?

A quick summary

  • There are about 9 million dwellings in Australia
  • Of which some 1.8 million are held by investors
  • So, 20% of Australian households hold an investment property and 80% don’t

More detail

The top investor age groups are:

  • 25% are aged between 55 and 64 years
  • 24% are aged between 45 and 54 years
  • 22% are aged between 35 and 44 years
  • And just 15% are aged under 34 years

When it comes to the investment property’s value (in today’s dollars), investor’s think that:

  • 35% are worth between $250,000 and $500,000
  • 18% are worth less than $250,000
  • 18% are worth between $500,000 and $750,000
  • And 6% think their investment property is worth over $2 million. Hmmm, tell them there dreaming!

And finally, how many investment properties do investor households hold? 

  • 73% hold one investment property
  • 17% hold two investment properties
  • 6% hold three investment properties
  • And just 4% hold four or more investment properties

To add the numbers to this spread:

  • 1,309,000 investor households hold one investment property
  • 302,000 hold two investment properties
  • 104,000 hold three investment properties
  • And just 85,000 investors hold four or more investment properties

The best way to understand what is going on is to go back to the actual numbers.

My Kitchen Rules

I hope you had a relaxing Easter break.

We typically have friends and relatives gathered around at our place.  And this year, both adult daughters were visiting, and it was interesting to observe where we spent most of our time awake whilst at home.

In short, the kitchen area and family/tv room got the lion share.

This reminded me of a study we completed a few years back for a home builder client who engaged us to find out where residents actually spent their waking hours in their home.

This work involved a survey of 100 family households – each holding two working adults and at least one child living at home – in Sydney, Melbourne and SEQld.  The survey period covered a typical week.  Most households surveyed spent, on average, about six hours – 360 minutes – awake in the house each day, including the weekends.

The results of this survey are as follows:

Rank House area Average time spent per day
1 Kitchen area 38% 137
2 Family/TV room 17% 61
3 Porch/Balcony 10% 36
4 Bedrooms 8% 29
5 Bathrooms 6% 22
6 Study/office 5% 18
7 Yard 5% 18
8 Shed/Garage 5% 18
9 Formal living room 4% 14
10 Formal dining room 2% 7
Total 100% 360

Some observations

Obviously, some areas of the typical family home are no longer needed.  The classic examples being the formal living and dining rooms.

Other areas, whilst having little waking time use over the typical week, are still important.  These include a study, yard, shed and garage.

It is interesting given the trend towards fast, pre-prepared meals – so the kitchen is increasingly acting as a food assembly area rather than a place where many actually ‘cook’ – that the kitchen still rules.

My opinion here is it is where everyone congregates which is important rather than the kitchen’s traditional functionality.

Other recent research by us – this time questioning potential buyers after they had visited a home display village – found that one of the first things a home buyer does when looking to a new home design is to check out where their family and friends can gather and if that space/s will work for their tribe.

This area, often by default in most houses, is the kitchen space, followed by the family room and/or balcony-porch.

For mine, a home that has these three spaces in a continuous, free following expanse more often than not comes up trumps.

How much is a view worth?

There is some science behind what we do and often there isn’t enough ‘light and shade’ between individual prices, resulting in some product selling quickly and other stock remaining unsold.

Getting the price right, across the board, is often hard and an independent set of eyes is well worth the effort.

One of things that is often misjudged, when it comes to pricing, is factoring in how much a view is worth.

To that end we have undertook a study in 2018 to help provide us with some guidelines and we found that certain types of view added a different value to a property.

Our work identified the different views available and then we looked at how much they can increase a dwelling’s value. Our investigation was also based on an identical new dwelling built in the same area (but with differing views) with a base price of $500,000.

The five major view types:

1. Ground level, unobstructed view (3% to 5%).  This type of view means that you are located at the same level as many of the other properties around you, but you have the advantage of having a view that allows you to see a large, non-residential space, like open space.  Such a view increases a properties sale price by between 3% and 5% and the new sale price could be as high as $525,000.

2. Rooftop, partially obstructed view (6% to 8%).  A view from above would suggest that you can almost see over all of the other properties around you but there may be a few buildings that partially obstruct your view. Generally, the higher you are, the more value a view can bring to your home, so a rooftop’s partially obstructed view can bring in an additional 6% to 8%, lifting the potential sales price to $540,000.

3. Unobstructed view from a medium elevation (9% to 12%).  This category is primarily reserved for homes that reside on the top of a small hill.  This particular view can see areas all around a home without any obstructions but aren’t high enough to see far beyond the house’s small community.  Having an open area will always command more money than if you can only see a few houses down, so this type of view has the potential to add between 9% and 12% to the value of your home, so the new sale price might be $560,000.

4. Unobstructed view from high elevation (15% to 25%). Doing much better than the previous view, being able to see a wide vista from the comfort of your own home can add significant value to it.  Our estimates here have a wide range because much depends on what you see.  Still, the value of the real estate can increase substantially, with the new sale price as high as $625,000.

5. Unobstructed water view (30% to 80%).  The biggest attraction of a view continues to be a large body of water, with the higher premiums being given to salt water.  Also, at the upper end of the premium range the water view needs to be unobstructed and the more rooms it can be seen from, the better.  Depending on the body of water, the residence can increase in value up to 80%.  This would mean that our $500,000 base house has a potential price tag of $900,000.

In summary, pricing a view is certainly not an exact science but as more and more properties are constructed in an area, the chances of finding a great view are becoming increasingly difficult.  Hence, properties with a view command a range of premiums now and these bonuses are likely to rise further in the future.

The three RPs

The Qld state government have just released a new data set for SEQ which represents the stock of approved and as-yet-unconstructed multiple dwellings.

For example, where 30 townhouses were approved and 10 were constructed, the approval balance included in these results would be 20 dwellings.  These dwellings would be counted as one (1) project approval.

Material Change of Use (MCU) multiple dwelling approvals data is a good indicator of the potential supply of predominately attached dwellings in the short to medium term.

Below are 3 tables which summarise the current state of play.

Table 1: SEQ: MCU multiple dwelling approvals – 2018

Local authority Project approvals Dwelling approvals % dwellings
Brisbane 1,590 61,127 48%
Gold Coast 743 36,282 28%
Ipswich 181 2,846 2%
Lockyer Valley 36 332 0%
Logan 458 7,298 6%
Moreton Bay 232 8,123 6%
Noosa 53 924 1%
Redland 124 2,029 2%
Scenic Rim 53 349 0%
Somerset 22 41 0%
Sunshine Coast 275 7,063 6%
Toowoomba 150 1,849 1%
South East Queensland 3,917 128,263 100%
Projectadvice.com.au + Qld Govt.  Stock of approved and as -yet-unconstructed multiple dwellings.  As a June 2018.

Table 2: SEQ: MCU multiple dwelling approvals – 2011 v 2018

Local authority 2011 dwelling approvals 2018 dwelling approvals Change
Brisbane 29,240 61,127 31,887
Gold Coast 12,213 36,282 24,069
Ipswich 2,785 2,846 61
Lockyer Valley 146 332 186
Logan 3,716 7,298 3,582
Moreton Bay 4,816 8,123 3,307
Noosa 594 924 330
Redland 2,269 2,029 -240
Scenic Rim 32 349 317
Somerset 17 41 24
Sunshine Coast 3,154 7,063 3,909
Toowoomba 1,016 1,849 833
South East Queensland 59,998 128,263 68,265
Projectadvice.com.au + Qld Govt.  Stock of approved and as -yet-unconstructed multiple dwellings.  As a June 2011 v June 2018.

Table 3: SEQ: MCU multiple dwelling approvals by project size – 2018

Project size Dwelling approvals % dwellings
Under 10 dwellings 8,353 7%
11 to 20 dwellings 6,608 5%
21 to 50 dwellings 14,815 12%
51 to 100 dwellings 19,105 15%
Over 100 dwellings 79,383 62%
South East Queensland 128,263 100%
Projectadvice.com.au + Qld Govt.  Stock of approved and as -yet-unconstructed multiple dwellings.  As a June 2018.

A quick summary

  • Some 3,900 multiple dwelling projects across SEQ have been approved but still have stock yet constructed.  The amount of unconstructed stock amounts to some 128,000 dwellings.
  • By our estimates that’s in excess of ten years supply!
  • Most of this unbuilt stock is in Brisbane (inner city area mostly) and on the Gold Coast.  Revisit last week’s missive here.
  • Not surprising, there has been a huge increase in the volume of unbuilt multiple dwelling supply over the last seven years; up by 68,000 from the 60,000 count in 2011.  That’s a 113% increase.
  • Again, the biggest increases have been in Brisbane and on the Gold Coast.
  • A review of the current unbuilt supply finds that three-fifths (62%) are in larger multiple dwelling projects.

The three RPs

These MCU figures also show that many attached dwelling projects are having problems securing enough off-plan sales to start construction.

Our recent work suggests that many suffer from a poor ‘local market match’.

The three RPs are vital:

  • Right Product
  • Right Price
  • Right Promotion

MCU defined

Multiple dwelling developments include relative’s accommodation, dual occupancies/duplexes, flats, units, townhouses, villas, apartments and includes short-term accommodation.

In addition, relocatable homes, tourist accommodation, and dwellings approved in retirement villages/facilities are included where they are self- contained.

Group accommodation where facilities are shared and purpose–built student accommodation are not included.

SEQ new dwelling supply

This post outlines the current state of play when it comes to new housing supply across SEQ.

This missive holds two charts plus a missive extra table at the end of the post.

Chart 1 explained

Chart 1 shows the interplay between housing demand and two measures of new dwelling supply – dwelling approvals and dwelling registrations.

Dwelling approvals (the grey line) is the beginning of the supply process.  Many new dwellings that are approved – and particularly in apartment projects – are not commenced as originally planned.

A more accurate measure of actual new housing supply is a dwelling registration.  This happens when the property title is transferred from the developer to the buyer and takes place at settlement.  See the red line in chart 1.

For more detail see our missive extra table below.

A quick summary

  • The SEQ new housing market was oversupplied between 2011and 2013. This was mainly due to too many new apartment buildings in Brisbane.
  • Since 2014, however, the new apartment approvals have fallen substantially. In addition, a lot of the approved new apartment stock hasn’t started.  When they actually proceed will depend on demand.  I anticipate that new apartment supply in Brisbane in coming years will remain subdued.
  • Whilst new dwelling registrations have increased in recent years – revisit the missive extra table – this rise is mainly for detached homes and townhouse style developments.
  • The lift in dwelling starts (registrations) is also in response to mounting population growth.  See chart 2 above.

End note

One of SEQ’s big plusses – when it comes to a safety net helping keep a floor under housing values – is that the region isn’t currently oversupplied with new housing stock.

It might have been overcooked a few years ago, but that no longer is the case.

Good news!

SEQ land market trends

This post outlines the current state of play when it comes to the SEQ land market.

This missive holds two charts plus a missive extra table at the end of the post.

A quick summary

  • SEQ land sales have dropped sharply over the last 12 months.  Yet land values continue to rise on an end price, also on a $/m2, basis.
  • Traditionally, like the dwelling market, a decline in land sales means weaker land prices, but this doesn’t seem to be happening at present across SEQ.
  • Our work suggests that; despite both state and local government assurances that there is amble land available for urban development in SEQ; on the ground this really isn’t the case.
  • The continued decline in median lot sizes also suggest that development land supply is tightening up.

Recent development trends

Our review of residential development trends over the past three years across SEQ has found:

  • 75% of all residential development applications in SEQ are for projects with under 10 dwellings, yet these small developments, when combined, make up just 5% of all the new dwelling starts.
  • In contrast, new projects with over 50 dwellings supply 80% of the new homes across SEQ, yet these larger projects account for just 10% of all development applications.
  • Some 45% of the apparent land supply available is currently set aside for medium to high density residential development, whilst 55% is allowed for detached dwellings and infill product like townhouses, duplexes and dual+ occupant housing.  This supply assumption is at odds with current local market trends and does not fit SEQ’s future domestic demographic shape.
  • A review of approved residential projects that are unlikely to proceed finds that a third of them, across SEQ, involve higher density development, whilst just 5% are for detached housing/townhouses.
  • Furthermore, the smaller the project the less likely it is to proceed. At present some 30% of approved projects with under 10 dwellings is stalled, whilst this proportion (as a count of total potential dwellings supplied) is just 7% for approved developments with over 50 dwellings apiece in SEQ.

Land supply constraints

My simple summation here is that there aren’t enough major development land parcels to cater for demand in SEQ.  The current rationale is that smaller residential projects and higher development yields will cater for an increasing proportion of SEQ’s housing stock.  Yet recent trends suggest that this isn’t working.

In addition to this market mismatch, the land which is perceived to be readily developable, really isn’t.  It is constrained by numerous things such as:

  • Fragmented land sizes and ownership
  • Unrealistic urban densities
  • Various excessively restrictive planning overlays
  • Lack of affordable and co-ordinated infrastructure provision
  • Urban economic inefficiencies
  • Long and uncertain approval processes

Some local councils are better than others, whilst other LGAs have their heads in the sand.  The recently assembled state government land supply council – based in their first round of reporting – appears to be echoing the status quo.

End note

For mine, the priority should be building homes for local residents not overseas buyers or international tertiary students.

The lack of appropriate new development land is already having a negative impact on local job creation and housing affordability. Unless SEQ increases its land supply and facilitates  more wanted urban development, economic growth will go elsewhere.

Timely urban development and infrastructure is the key to facilitating economic growth.  You cannot have one without the other.

It’s time to pull your finger out SEQ!

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