Report reveals falling dwelling approvals and population surge in the region
The urgency to address the housing crisis in South-East Queensland has been underscored by the latest RPM Group report, which shows a significant drop in dwelling approvals over the past year amid a massive spike in population growth.
Demand pressures have driven double-digit gains for apartment prices and residential land in the Greater Brisbane region over the past year, with the RPM report revealing a concerning 28% slump in apartment approvals, compounded by an 8% drop in detached dwelling approvals and a 2.5% fall in townhouse approvals in 2023.
This is despite the state’s population growing by 143,000 people, the highest net increase since interstate and international migration resumed after the pandemic in 2021. The net increase in population, primarily driven by migration, was 23% higher than the previous year.
Under the SEQ Regional Plan, an average of 34,552 dwellings are required each year between 2021 and 2046 to meet the heightened demand. Currently, approvals are just above 32,000 for dwellings, and production is well short of targets, with only 18,783 new dwelling lots registered in SEQ in the year to March 2024.
Clinton Trezise (pictured), Queensland managing director of RPM, emphasised the urgency of bringing more housing to the market to meet the rising pace of population growth, particularly in the south-east corner where most new arrivals have settled.
“The data vindicates the state government’s proactive approach to fast-tracking housing supply after Queensland experienced another record-breaking year of population growth, with big gains in both interstate and international migration,” Trezise said.
“One of the key findings in our latest report is the freefall in apartment approvals which as a sector, has been critically impacted by rising costs and lengthy approvals processes.”
The RPM South-East Queensland Greenfield Market Report covers the region from the Sunshine Coast to the Gold Coast and west to Scenic Rim and Toowoomba. The region saw a 13.1% fall in approvals over 2023 to 32,453 dwellings – 4,895 fewer than the year before. Apartments took the biggest hit, slumping by 2,972 approvals to 7,535, while house approvals were down 1,811 to 20,594. Townhouse approvals were relatively steady, dipping by just 112 to 4,324.
Meanwhile, the median house price in the Greater Brisbane area rose 7% to $824,000 last year, while the median for apartments rose 13.3% to $555,000 and for land 13.6% to $359,000.
“The lack of supply across all types of housing is having a knock-on effect on pricing, but particularly apartments and land,” Trezise said. “Apartment prices have been hit on two fronts – a lack of supply and rising costs.
The report highlights that despite significant price increases in vacant land and build prices, new house and land packages remain relatively affordable compared to the established market.
“Greenfield land developments in South-East Queensland still provide affordable options for first time buyers and upgraders, however with continued low supply there is significant pressure on affordability,” Trezise said.
“The broader spike in land prices also reflects the forecasts we made last year of the significant lag between the number of new residential lots being registered and demand that continues to see more people vying for fewer sites. This is an issue that has been building for some time.”
While record immigration numbers are expected to ease in coming years, they will remain elevated in the near term and continue to drive price growth in South-East Queensland, he added.
“That makes supply the key challenge for the immediate future and the initiatives by the state government to improve supply are critical to achieving this,” Tresize said. “The problem is complex and requires a concerted effort at all levels of government and industry to improve the approvals process and to provide critical infrastructure to service and increase greenfield volume, in order to solve the housing crisis in South-East Queensland.
“But the tailwinds driving the South-East Queensland property market are incredibly positive and have been for some time. It’s also a region where the Australian dream of owning your own home is still alive, and that is reflected in the number of people flocking to the state. We just need to get the mix right to ensure that this growth is sustainable.”
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