SEQld: Land Prices

There is a somewhat misguided debate going at present, suggesting that Australia’s houses are too big, especially when compared to other countries, and that is one of the main reasons why housing here is expensive.

Putting aside the differences in how house sizes are actually measured across countries, the local evidence strongly suggests that building the biggest house you can afford makes sense in Australia, as it is the land the grows in value and not the actual dwelling.

Let’s explore this notion a bit further.

Over the last 20 years, house prices in Australia have grown by 4.5x, whilst the cost of building a home has risen by just 1.8x.

When looking at the established housing market, in 1998 the land’s value accounted for 45% of a dwelling’s resale price. Today, the land’s average value is closer to 65%.

Land is becoming more expensive – blame town planning, developer land banking, dribble release management, a general lack of supply or population growth – and as a result two trends are evident:

  • land sizes are falling, and
  • the land price per square metre is rising.

Also adding to weigh behind these two trends are changing demographics, and sociographics, too.  Many want to live closer to the action and/or have little time for backyard maintenance.  A yard, to many these days, isn’t worth the cost anymore.

Some statistics

When looking at our capitals, average lots sizes have shrunk from 700m2 in 1998 to about 450m2 today.  Whist the price per square metre of the land sold has increased and, in some cases, dramatically.

For example, in Sydney new land values averaged $500/m2 ten years ago, but today they have more than doubled to $1,150.  A similar escalation rings true for vacant land sold in SEQ, up from $300/m2 in 2008 to $600/m2 today.  And in Melbourne the growth rate has been on a tear, up from $250/m2 a decade ago to $900/m2 as at June 2018.

Across south east Queensland, a similar trend is apparent with new urban land values (on a rate per square metre basis) increasing between 42% and 130% over the last ten years.

The average size of lots sold across SEQ have dropped by 33% over the same time frame.

In summary, land values have doubled, whilst lot sizes have shrunk by a third.  See table 1 below.

Table 1:

Change in land values and lot sizes over the past decade

South east Queensland

LGA Total change in land values and lot sizes
$/m2 Lot size
Brisbane (C) 130% -28%
Gold Coast (C) 96% -35%
Ipswich (C) 75% -29%
Lockyer Valley (R) 42% 1%
Logan (C) 102% -33%
Moreton Bay (R) 124% -35%
Noosa (S) 80% -24%
Redland (C) 42% -39%
Scenic Rim (R) 60% -10%
Somerset (R) 52% -18%
Sunshine Coast (R) 72% -24%
Toowoomba (R) 71% -2%
Total SEQ 105% -33%
Queensland Treasury, Years ending Sept Qtr. 2008 v Sept Qtr. 2018

End comment

Much more needs to be done regarding the price of land when it comes to making housing more affordable.

Thoughts needs to embrace how we tackle:

  • Land use
  • Supply
  • Lot sizes and frontages
  • Vehicle use, access and storage
  • Road access including ingress and egress
  • Tenure
  • Servicing

Some ideas include:

Allowing front yards to be used for a range of activities including commercial use such as ‘pop up’ stalls.  Having no minimum lot sizes or frontages.  Parking cars elsewhere overnight and on weekend like in nearby schools or even shopping centres.  Providing rear lane access and shared road reserves in low trafficked areas. Leasehold not freehold.  More off grid – or at least semi off grid – development.

I recently discussed land supply in some depth.  To revisit go here:  SEQ: Land Supply.

Changes regarding how we build homes in the future is much needed to, but for mine getting the cost of the land down is key to improving housing affordability.

SEQld: Land Supply

Broad hectare refers to land parcels greater than 2,500m2 planned for residential development.  Also, broad hectare supply – either by area or dwelling yield – includes only the developable component of the land parcel.  Constraints to development, such as flooding and protected vegetation are removed.

In short, the broad hectare count in south east Queensland quantifies the amount of residential land supply and the number of dwellings that could potentially be accommodated over select time frames.

It must be noted that further development outside the identified broad hectare land parcels could also accommodate additional housing by way of infill development.

However, only 15% of new housing across SEQld is currently provided by infill development.  Most of the new homes built across south east Queensland are supplied via broad hectare land parcels.  See table 1 below.

Table 1: Distribution of dwelling approvals by infill or broad hectare land size 

LGA Development type
Infill Broad hectare
Brisbane (C) 43% 57%
Gold Coast (C) 12% 88%
Ipswich (C) 6% 94%
Lockyer Valley (R) 59% 41%
Logan (C) 11% 89%
Moreton Bay (R) 8% 92%
Noosa (S) 97% 3%
Redland (C) 30% 70%
Scenic Rim (R) 5% 95%
Somerset (R) 21% 79%
Sunshine Coast (R) 14% 86%
Toowoomba (R) 14% 86%
Total SEQ 15% 85%
Matusik estimates, Queensland Treasury.  Total dwelling approvals over the past three financial years.

Regardless of land size, residential development is dependent on adequate land supply.

Broad hectare data can be used to identify a shortfall in residential land supply and to trigger a planning response. It is important that adequate levels of residential land supply are maintained since it is one factor affecting housing affordability.

The current SEQld broad hectare count was done in September 2013. Queensland Treasury, however, updates this count quarterly, removing potential housing stock as new lots are developed and registered.

The information in this missive is based on June Quarter 2018 data.

Key findings

Over the next ten years it is estimated that some 156,500 new dwellings can be supplied via broad hectare land across south east Queensland.

Table 2 provides a breakdown by local authority area below.

Table 2: Broad hectare land supply available over next ten years by dwellings

LGA Available within next ten years
Hectares Dwelling yield
Brisbane (C) 669 22,599
Gold Coast (C) 1,160 10,184
Ipswich (C) 2,320 32,917
Lockyer Valley (R) 1,661 8,341
Logan (C) 3,956 34,079
Moreton Bay (R) 2,100 13,858
Noosa (S) 30 303
Redland (C) 200 3,918
Scenic Rim (R) 1,115 3,927
Somerset (R) 388 1,608
Sunshine Coast (R) 1,244 16,915
Toowoomba (R) 1,076 7,824
Total SEQ 15,919 156,473
Matusik, Queensland Treasury.  Medium dwelling yield expectation which is based on realistic assumptions as per land fragmentation and ownership.

At first glance this seems a lot of new homes. But when you compare this potential quantity against the annual need to build new dwellings; the broad hectare land supply mooted over the next decade appears to be below demand. See table 3.

Table 3: Broad hectare land supply versus demand

LGA Ten-year dwelling supply Annual housing demand Current supply in years
Brisbane (C) 22,599 7,725 2.9
Gold Coast (C) 10,184 4,896 2.1
Ipswich (C) 32,917 2,094 15.7
Lockyer Valley (R) 8,341 296 28.2
Logan (C) 34,079 1,938 17.6
Moreton Bay (R) 13,858 3,771 3.7
Noosa (S) 303 242 1.3
Redland (C) 3,918 844 4.6
Scenic Rim (R) 3,927 291 13.5
Somerset (R) 1,608 234 6.9
Sunshine Coast (R) 16,915 2,756 6.1
Toowoomba (R) 7,824 716 10.9
Total SEQ 156,473 25,803 6.1
Matusik, Queensland Treasury and ABS various.  Annual housing demand based on last ten years.

Overall there is a need to build about 26,000 new dwellings in SEQld each year, yet the broad hectare land parcels available (at present) over the next ten years can only yield about six years supply.

Some areas are very undersupplied with new broad hectare opportunities, whilst others local council areas have amble development parcels.

Pets

Just over two-thirds of Australian households own a pet.

Of these 38% are dog owners and 29% are cat owners. In addition to this, just over half of the people who don’t currently own a pet admit that they would like one.

Australia has the highest rate of pet ownership in the world. Only America, where 65% of homes have a pet, comes close.

In total, it is estimated that there are 24 millions pets in Australia. This includes dogs, cats, birds, fish, reptiles, insects, cows, sheep, goats and even horses. I don’t know how they count the fish and insects, but there is a regular pet count so someone is doing the hard yards.

And if these statistics don’t prove how important pet ownership is in Australia, then perhaps this will: more of us live in a house with a cat or a dog than with a child.

By excluding pets, landlords are missing out on a significant rental premium; longer tenancies and often less hassle.

We have found that tenants will pay between 10% and 20% more to have a pet. The higher premium is when the property is well catered for pets – like having a secure fenced yard.

Most tenants with pets also want to say longer in their current rental abode, with the average tenure being 24 months and not the more typical 6 month lease.

This is because there are not a lot of rental properties available to lease that allow pets.

For example a quick search on realestate.com.au has found that just 22% of the rental properties available for lease, in Brisbane, allow pets. This proportion is 25% on the Gold Coast and 31% on the Sunshine Coast.

In regional towns, rental properties allowing pet ownership appears higher with 38% of Mackay’s properties for lease, for example, allowing pets.

Allowing pets is higher, as one might expect, for detached homes (33% in Brisbane) and is lower for townhouses and apartments (both 17% and again for Brisbane).

Our work has also found that many tenants with pets are prepared to pay a pet bond. My suggestion is that the interest earn’t here goes to the RSPCA.

But in actuality the vast majority of tenants with a pet aren’t different to those that don’t have an animal. If fact my experience, true it is a small sample, has been that tenants with pets were better occupants than those without a pet.

Now I live on acreage, have pets of many types and so maybe I am biased.

Housing Affordability

A lot is being written and said about the future of Australia’s house prices.

There seems to be a lot of confusion about the issue.

I have included three tables in this missive in an attempt to outline what I think is the real state of play.

Table 1
Housing affordability #1

Australian Capitals

Capitals Median house price Median family income Current price to income ratio Affordable price Difference
Sydney $1,165,000 $107,500 10.8 $753,000 $412,000 35%
Melbourne $829,000 $99,000 8.4 $593,000 $236,000 28%
Brisbane $524,000 $98,500 5.3 $493,000 $31,000 6%
Adelaide $465,000 $86,000 5.4 $430,500 $34,500 7%
Perth $513,000 $106,000 4.8 $529,000 -$16,000 -3%
Darwin $503,000 $94,750 5.3 $473,750 $29,250 6%
Canberra $648,000 $135,250 4.8 $676,000 -$28,000 -4%
Hobart $473,000 $85,000 5.6 $424,750 $48,250 10%
Average* $785,000 $101,000 7.8 $597,750 $187,250 24%

Table 1 shows that most major capital city markets aren’t that overvalued.

Sydney, Melbourne and to some degree Hobart are, but median house values, for the rest, fall between 4.5x and 5.5x median family household income.

Just two years ago, many could borrow 10x (or more) of their household income to buy a property.  Today that has been scaled back to 5x to 6x household income.

My general affordable price benchmark is 5x median household income but I use a higher ratio for Sydney (x7) and Melbourne (x6) because history shows that these two cities command a premium.

Table 1 also shows that there are many housing markets in Australia and not just one.

So if it all goes to shite then maybe the damage is most likely to be contained to a few spots.  This, of course, assumes that things economic don’t implode or that we don’t panic.  Greed often turns to fear.

Table 2
Housing affordability #2

Brisbane region

Indicators 1994 2018
Median house price $126,000 $524,000
20% deposit 20% 20%
Amount borrowed $101,000 $419,000
Mortgage rate pa (from major bank) 9.1% 5.2%
Annual payment (P+I loan) $13,000 $31,000
Loan time frame 30 years 30 years
Median household income $65,000 $98,500
% income needed to service loan 20% 31%
Ratio house price to household income 1.9 5.3

Table 2 – using Brisbane as an example – shows that although many places aren’t over cooked (i.e. ratio of house price to household income) there is very little room from house prices to improve unless either costs decline or incomes rise.

It now takes – on average – 31% of a average Brisbane resident’s household income to buy a house.  That translates to 5.3x median family household income.

A generation ago the income needed to service an average loan was 20% (as interest rates were higher) but the median house price was very affordable at 1.9x family household income.

My take on this is that we are likely to experience ‘the big yawn’ for the next 5 years, but most probably 10 years or so, whereby dwelling values don’t rise much across most places in Australia.

It reminds me of the 1990s.

Table 3
Housing affordability #3

Brisbane region

Indicators 1994 2018 Increase $ Increase %
Median house price $126,000 $524,000 $398,000 315%
Median household income $65,000 $98,500 $33,500 51%
Amount borrowed $101,000 $419,000 $318,000 315%

Table 3 brings my last statement home.  Much of the past price growth in Brisbane – and everywhere else in Australia too – was due to an increase in loan size rather than growth in household income.  That feels like a once off to me.  Well it is very unlikely to happen again anytime soon.

In summary, house price growth over the last 25 years was largely manufactured by the reduction of interest rates, whilst at the same time, punters were encouraged to borrow a lot more.

End notes

Unless you bought at the height of the boom, and overpaid plus overextended yourself, then the coming changes over the next 5 to 10 years might not have that much impact on you.

True you might not be in a rush to buy or sell a dwelling.  Why haste if prices are flat?

But if you did overpaid and especially overextended yourself then you might be in for a fair bit of pain.

10 things: Urban Commute

The Grattan Institute earlier this month released another great report on Australia’s urban landscape.

To read the 87-page report go here.

But for those of you that are time short, I have pulled together 10 things you need to know about this work. Many of them are quite surprising.

10 things

1.  Most residents don’t live far from where they work, and this isn’t changing much.

2. Commuting distances have changed little in most of our cities in recent years.

3. Commuting times have also been largely stable over the last decade.  See the table below.

Three-quarters for work trips are no longer than this

Capital city 2008 2016
Sydney 60 minutes 62 minutes
Melbourne 45 minutes 48 minutes
Brisbane 42 minutes 46 minutes
Perth 34 minutes 39 minutes
Adelaide 30 minutes 30 minutes
Canberra 30 minutes 30 minutes

4. The CBD’s are growing (in terms of jobs) in Sydney and Melbourne but are actually shrinking in most other Australian cities.

5. Most new jobs are in other suburban areas, with three out of four jobs widely dispersed.  See the diagrams below.  Diagrams one and two are what is in most town planners’ heads, but the third diagram is what really goes on.

6. Living in a large Australian capital city doesn’t mean travelling much further than living in a smaller capital or major regional town.

7. The common urban myth “double the population means double the commute” doesn’t apply.

8. Population growth has a bigger impact on commuting distances and times in smaller cities than large ones.

9. People accept a longer commute to live in a lifestyle area and in particular close to the beach.

10. In recent years very few workers have actually changed the way they get to work.  See the table below.

Transport method used to travel to work

Capital city Mode of transport 2011 2016
Sydney Car 68% 67%
Public transport 23% 24%
Bike/walk/run 5% 4%
Worked at home 4% 5%
Melbourne Car 75% 75%
Public transport 15% 14%
Bike/walk/run 6% 6%
Worked at home 4% 5%
Brisbane Car 77% 78%
Public transport 15% 13%
Bike/walk/run 4% 4%
Worked at home 4% 5%
Perth Car 80% 80%
Public transport 13% 13%
Bike/walk/run 4% 3%
Worked at home 3% 4%

Some caveats

But some caveats do apply.

1. Some cities have grown a lot in recent years – especially Sydney and Melbourne – and much of this increase in population is due to a lift in net overseas migration.

2. Most overseas migrants settle in Sydney and Melbourne.

3. Many recent migrants settle in the more urban parts of our capitals, whereas longer term residents live (mostly) in the middle and outer suburbs.

So, some of the ten points listed above have been influenced by recent demographic trends.

Suggestions

Yet here are some things worth considering that might actually improve the current state of play.  Some of these suggestions are Grattan’s and some of them are mine. These include:

1. Get more people to work from home via tax breaks and favoured appointments.

2. Question the mega projects.  Incremental improvements are likely to have more impact. In Brisbane for example there is a need for many more bridges crossing the Brisbane River.  These are cheap as chips when compared to such white elephants as Cross River Rail.

3. Encourage people to move closer to work or encourage work to relocate closer to the workforce.  Property stamp duties stop local moves.  Restrictive town planning and zoning stop new builds. Cheaper and different building methods are need too.  Visit here.

4. Change the way people get to work.  A congestion tax and/or free public transport during peak periods.

5. Get kids to catch the bus or train to school. Given the increasing demand to live in the ‘right’ school zone, many of the kids can probably walk to school.  And I am a parent of two daughters who were made to catch the bus.

6. Stagger school start times; school holidays and change the 9 to 5 work day.  These schedules are a legacy of the industrial age and/or unionised labour.

7. Provide clear and separated modes of transport. Get push bikes off the road but have well connected bike lanes.  Better connectivity for walking too.

More Bums, Less Shine

Each quarter the ABS releases its Demographic Statistics which holds the latest population results for each Australian state or territory.  These figures include interstate migration movements.

Queensland’s improving population growth is usually accompanied with rising property values.  But this doesn’t appear to be the case at present.

But before I explain what I think is going on, lets quickly summarise where things are at when it comes to population growth.

  • Australia’s annual population growth is rising and currently growing by just under 380,000 per annum
  • Three-fifths of this growth is due to net overseas migration
  • Some 250,000 or two-thirds of this growth is taking place in NSW and Victoria
  • Queensland’s annual population growth is now 83,000, up from 58,000 in 2015 – so a big improvement

Talk has now turned to it being Queensland’s turn to enjoy some serious property value appreciation as residents migrate north from Sydney and, in some instances, from Melbourne.

Many believe this to be the gospel truth.  Trying to contradict this mindset is increasingly hard.

So, I will let my four charts do a lot of the talking.

Comments

Chart 1 shows that Queensland’s net interstate migration is on the improve, up from 6,000 people in 2014 to 24,000 over the last twelve months. But it still accounts for less that 30% of the state’s annual population growth.  So, the other components of population growth – being natural increase and net overseas migration – are really having a bigger impact.

To that end it often pays to take a wider view, so chart 2 shows total Queensland population growth – advanced by twelve months, see the grey line on chart 2 – compared against annual house price growth (red line) in Brisbane.

In general, there is a relationship between the two – higher population growth usually means more upward pressure on house price growth.  Yes, sometimes this relationship has lapsed for a period of time but there have been valid reasons why as I have noted in chart 2 via the grey highlights.

And importantly chart 2 suggests that property values across Queensland, and in particular across the south east corner of the state, should be improving at a much faster growth rate. See my blue highlight.  Yet the annual growth rate remains sluggish and has even taken a backward step over recent months, despite the lift in population growth.

Yes, the recent overbuilding of inner Brisbane apartments is having an impact but in the overall scheme of things this impact is small.

Something else must be going on.

That something else is shown in Chart 3.  This chart shows that job creation isn’t getting ahead of the increase in population, so Queensland’s level of unemployment isn’t changing much.  In other words, a high proportion of the interstate migrants moving to Queensland are unemployed.

On that note most of Queensland’s interstate migrants come from Sydney and in the most part are young couples trying to make a new start in Brisbane.  In short, they are economic refugees.

And chart 4 – for mine – brings home the bacon.  This chart shows that the net economic benefit per capita or head of population in Queensland is in a slump.  It is rising in both New South Wales and Victoria.

This chart also shows that there is a strong connection between economic benefit per head and house prices. When we aren’t all sharing in the economic spoils, local property values either flat line (as they did in the early to mid-1990s) or actually fall (like they have done in the recent past).

Because of the delay factor between economic well-being and house values, the recent fall in economic benefit per head suggests that local house values, could actually stagnate, not rise, in the coming years ahead.

End note

So, more bums on a Queensland seat – this time around – isn’t shining everyone’s backside.

Yes, the total rate of economic growth in Queensland has lifted of late, but this isn’t being shared amongst the local residents as it has been done in the past.

To summarise, in Queensland, there is too many people and not enough economy.

It gets to the stage where just increasing the size of the local population isn’t enough.

So, whilst there is increased interest from interstate (and an overall lift in population growth), unless we see a dramatic improvement in the state’s economy, more bums on seats isn’t really doing the average Queenslander much good.

And this is why there is limited house price growth.  In fact, Queensland’s housing market may actually be punching above its weight. Generic house price growth in south east Queensland over the next year or two is far from certain.

Supply v Demand #2

Following on from last week’s post – revisit here – this week I have looked at the state of play for new housing supply and underlying demand for south east Queensland.

Two tables are included, the first looks at the situation by major region – inner Brisbane (within 5km of the CBD); middle Brisbane (between 5 and 20km); outer suburbs (20 to 50km) and the outer conurbation (50km+) – and the second table, by local authority area.

The LGA table is at the end of the post in the Missive extra area.

Table 1: Underlying dwelling demand versus actual dwelling supply  

LGA Underlying demand Dwelling supply Status of new housing supply
Inner Brisbane 19,657 21,350 1,693 9%
Middle Brisbane 16,809 23,426 6,617 39%
Outer suburbs 39,734 43,035 3,301 8%
Outer conurbation 47,601 42,366 -5,235 -11%
Total SEQ 123,801 130,177 6,376 5%

Some comments

1. Inner Brisbane’s supply overhang is almost absorbed.  For more go here.

2. There is too much of the wrong stock across Brisbane’s middle ring suburbs. Think five + storey apartment product in locations without high enough local amenity and infrastructure provision to offset this building density.

There is a need for more infill housing; boutique townhouse or terrace projects and the old fashion three storey six packs but only in the right locations and with a very high degree of market match.

3. Overall the outer suburbs are keeping up with demand, but it isn’t an even spread. Logan and Moreton Bay are struggling, whilst Ipswich and Redlands have enough registered new stock for the time being.  See the Missive extra table below.

4. The outer conurbation, across the board, is struggling with new dwelling supply.  Again see the Missive extra table below.

Supply v Demand

Much is written about population growth in the real estate space, with most making comments about how it adds to underlying housing demand.

In equal fashion a lot is written about new housing supply, with many quick to jump on either the ‘under supplied’ or ‘oversupplied’ bandwagon.

Most of the time these discussions are in isolation from each other and it is rare to see them interwoven. But they should be because it’s the relationship between supply and demand that matters most.

I have included four charts that outline the state of play for new housing supply and underlying demand (that is the need to build new dwellings) for the four major capitals.

In summary these show that Sydney is oversupplied; Melbourne is more or less balanced; Brisbane’s recent oversupply looks to be short lived and Perth is almost through its market correction.

Inner Brisbane Apartments

Much has been written about the apartment market and the perceived state of play of inner Brisbane apartments.  Like most things in real estate, hyperbole is the order of the day, with the recent boom and current doom being exaggerated.

Our research has found that inner Brisbane is now struggling to keep up with the underlying demand.   That isn’t a typo.  I repeat it is heading for an undersupply.

The recent oversupply of new apartments has been shortlived.  The main reasons for the quick ‘oversupply to undersupply’ reversal include growing demand to live downtown and the swift contraction of new apartment supply.

Let’s look at the demand side of the equation. The official population forecasts for the inner Brisbane area are way below recent trends.  We estimate, based on the last decade, that there is a need to build 6,000 new dwellings each year across inner Brisbane.  Nearly all of these new dwellings will be apartments.

This forecast applies for the next ten years. But we think the need will be greater, especially now that Brisbane City Council has effectively said NO to infill suburban development.

On the supply side, there are 185 new major apartment projects proposed across inner Brisbane, totalling around some 48,250 apartments. However only 30% of this stockpile is under construction and an addition 17% or about 8,000 apartments are probable over the next two to three years.

Over half of the currently proposed inner Brisbane apartment stock is unlikely to commence anytime soon.

Further good news is that inner Brisbane’s available apartment rental supply is now falling.  This contraction has been quite sharp.  Many of Queensland’s recent interstate migrants from Sydney are young couples trying to make a new start in Brisbane.  They are mostly renting new inner city apartments.

Now we aren’t going for spruik here – and no doubt that this is some sorting out still to do – with, for example, apartment prices still falling for one-bedroom and two-bedroom apartments.  However, prices are now rising for larger apartment stock.  A similar trend can be seen when it comes to weekly rents.

Importantly the rate of price fall for the smaller one and two bedroom stock is now braking and hasn’t been as bad as many commentators predicted.

And whilst last year most apartment sales – both for new stock and resales – sold to investors, this is now changing on two fronts – less interstate investor interest and more locals buying as owner residents.  Apart from a few hot spots, overseas buyers have never really had that much interest in buying in Brisbane.  They seem to stick to Sydney and Melbourne.

All real estate obeys a cycle – and as we noted a few weeks back this cycle runs on short, medium and long term time frames.

The short-term cycle is about supply and demand; the medium term is about structural changes like zoning and the long term concerns the economic, social and demographic trends.

The Brisbane inner city apartment market gets a tick for all three cycles.

Cars

Much is written about population growth and its positive impact on most things economic.

But there is also sting in that tale.

Despite the intelligentsia telling us the opposite, the number of vehicles per capita, is on the rise in Australia.  It is currently 776 vehicles per 1,000 bodies.  It was 723 a decade ago and just 644 in 1998.

Gentrification, urbanisation, uberisation and all those other trendy urban movements haven’t yet had an impact on our car use and especially the number of cars on our streets.

There are just over 19 million registered vehicles in Australia, which is up 25% on ten years ago.  Pity our road and parking capacity hasn’t increased anything like that volume over the same time frame.  It is no surprise that traffic congestion has become much worse and many of our streets are now parking lots.

Registered vehicles
Australia, states + territories

State/Territory 2018 (no) Decade change % change
NSW 5,618,385 1,098,422 24%
Vic 4,923,032 1,001,458 26%
Qld 4,045,335 871,888 27%
SA 1,408,960 230,056 20%
WA 2,234,564 487,985 28%
Tas 480,935 89,608 23%
NT 162,500 39,514 32%
ACT 302,568 60,806 25%
Australia 19,176,279 3,879,737 25%

Tasmania, in particular, is feeling the change with 921 vehicles per 1,000 people and a 17% increase in this statistic over the past ten years.  Queensland, South and Western Australia are also feeling the heat.

Interestingly Victoria – read Melbourne – has seen little change in the ratio of vehicles per population.  Yes, their recent high rate of population growth has seen their streets get more crowded, but it is not as bad as it might have been.

Registered vehicles per 1,000 population
Australia, states + territories

State/Territory Vehicles/1,000 Decade change % change
NSW 712 59 9%
Vic 774 25 3%
Qld 817 60 8%
SA 816 72 10%
WA 863 53 7%
Tas 921 134 17%
NT 660 96 17%
ACT 733 35 5%
Australia 776 53 7%

There are lots of lessons here including Melbourne’s somewhat more decentralised workforce; medium density infill housing in Melbourne’s middle and outer suburbs; the city’s range of effective public transport options and a strong local culture of public transport use.  It isn’t prefect but better than what is (or more to the point, isn’t) happening in our other urban centres.

So, when you hear all the positives about population growth, remember 1,000 additional people means 776 more cars, Australia-wide, and closer to 817 more cars in Queensland.

End note

Maybe driverless cars will reverse this trend.  GoGet and other car sharing schemes might help too.  But I am not that convinced.

For mine the key is to get people working closer to where they live and to provide housing closer to where they work.  Yet most councils and state governments have planning schemes and policies that do the opposite.

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