Urban Growth Models

As Australia continues to face an escalating housing crisis, the debate frequently focuses on planning related barriers to much needed supply. Internally we have been discussing various urban growth models and are interested in the market impacts related to containment and densification. Artificial growth boundaries began with Melbourne 2030 (2002) and subsequently the State Governments in NSW and Victoria have been focused on announcing housing targets but lacking a strategic vision.

The WA planning system is a strong framework for consideration nationally. Stuart McKnight our Principal Advisor based in Perth believes that if you allow 'urban sprawl', but you manage it and coordinate the infrastructure, you can contain prices and meet demand.  Whilst property values have increased, the real issue in Perth is not the land market, but the dwelling construction cost and timeframes. The ABS producer price index for Perth shows a 40% cost increase for house construction in the four years to June 2024 – by far the largest increase anywhere in Australia since records began in 1966.

Market commentary focuses on the lack of housing lots on the market, but overall, developers in the Perth metro region have been able to meet the market. Median prices have increased, but the prices per square metre have only just come back to the levels they were at ten years ago (which were too high at that time but are now 'reasonable' by national comparison).

You can read our discussion paper here.