Michael Buxton, emeritus professor of environment and planning at RMIT University, said land banking by developers had been a problem for decades.
“The government makes a large amount of land available in theory through rezoning and fast-tracking approvals… but the decision is left to the developer company as to the rate at which this land supply will be made available . So many of them are drip-feeding the land to keep land prices high.”
A Victorian Government spokeswoman said developers were expected to release land for housing after all planning processes were completed.
“The increased supply of new homes is one of many factors helping to lower the cost of buying a home,” he said. “It is disappointing that developers continue to land banks and block the delivery of homes to manipulate the market for profit.”
In Woodlea, on Melbourne’s western fringe, there are large vacant lots waiting to be sold. When blocks are released, usually 25 each month, buyers go online to grab them. But despite the demand, there are no more blocks available for eager buyers.
Praveen Mandala bought his block on the 711-hectare estate, 29 kilometers from Melbourne’s CBD, in 2015 shortly after Woodlea began the eighth stage of development. “There was absolutely nothing, just paddocks and a sales office,” he said.
Aerial view of Woodlea Estate in Aintree on Melbourne’s western fringe. Credit: Eddie Jim
Mandala said people used to “queue for days like an iPhone launch” to buy a block at Woodlea, but the process has moved online with lots being released every month.
He paid $330,000 for his 640sq m block, but said since then “prices have skyrocketed” and the cost was closer to $450,000 for a 448sq m block.
Mandala loves living in Woodlea and is concerned rising prices and the challenge of securing a plot is making it harder for more people to move to the area.
“It’s not just affordability. You also have to be lucky to get a piece of land.”
Land sales in Woodlea are controlled by developers, property giant Mirvac and Malaysian group VIP. After launching in 2015, Woodlea was billed as “Australia’s best-selling community” and the development was expected to run for 18 years until 2033.
However, more than six years later, Prosper’s analysis of all sales in Woodlea, assessed by the Victorian Valuer-General and recorded by CoreLogic, reveals that only 25.1 per cent, or 1652 of the 6584 lots, were they had sold in July 2021.
A spokeswoman for Woodlea and Mirvac disputed those figures, saying the development had sold around 60 per cent of new home sites and had around 700 home sites under construction.
“The average sales rate at Woodlea is above what is achieved in similar projects of this scale,” he said. “We aim to launch new domestic sites as soon as possible, but this is dependent on a number of factors including regulatory approvals, delivery of critical infrastructure and services, supply and workforce capacity , as well as market demand.”
Queues in 2018 to inquire about buying land in Woodlea. Credit: Steve Pinirou
Prosper’s analysis of sales data from Atherstone in Melton South found that after nine years of development, 69.51 per cent of lots remained and the total price gain for an average lot was $123,907 during that time.
According to developer Lendlease, by January this year, Atherstone had sold 63 per cent and liquidated 54 per cent of the total residential lots. Anne Jolic, head of Victorian communities at Lendlease, said Atherstone was a “top performing” community.
“We have advanced the delivery of many lots year-on-year to meet strong market demand and to deliver more homes to meet Victoria’s critical supply shortage,” he said.
Prosper’s analysis of Manor Lakes near Werribee found that after 16 years of development 43.31 per cent of lots remained and the price gain for an average lot was $251,059.
Dennis Family, the developer of Manor Lakes, did not respond to a request for comment.
Peak development industry body the Urban Development Institute of Australia said the delays were not the fault of the developers but were a result of the post-structure plan approval process enclosure
Chief executive Matthew Kandelaars said Prosper’s report was based on “wrong assumptions”.
“The industry wants to bring land to market, but from engineering approvals to water and utility connections, it’s drowning in red tape,” he said. “We have called for these processes to be streamlined as a matter of urgency.”
However, Fitzgerald said all the projects Prosper looked at already had planning approval and any delays were the developers’ choice.
“Australia needs to consider third market housing models such as community land trusts, which are developments with community and accessibility at the forefront rather than shareholder responsibilities, along with the” good property tax reform.” Developers say they can finish a master-planned community in 20 years, but they average about 40 years over the course of our study,” he said.
“We need to slowly raise land taxes so that in 10s and 15s it becomes less and less profitable to hold real estate for bailout.”
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