Profiling the nature and context of the Australian prefabricated housing industry

The current state of the prefabricated housing market in Australia is systematically profiled, guided by a theoretical systems model. Particular focus is given to two original data collections. The first identifies manufacturers and builders using prefabrication innovations, and the second compares the context for prefabricated housing in Australia with that of key international jurisdictions. The results indicate a small but growing market for prefabricated housing in Australia, often building upon expertise developed through non-residential building applications. The international comparison highlighted the complexity of the interactions between macro policy decisions and historical influences and the uptake of prefabricated housing. The data suggest factors such as the small scale of the Australian market, and a lack of investment in research, development and training have not encouraged prefabrication. A lack of clear regulatory policy surrounding prefabricated housing is common both in Australia and internationally, with local effects in regards to home warranties and housing finance highlighted. Future research should target the continuing lack of consideration of prefabrication from within the housing construction industry, and build upon the research reported in this paper to further quantify the potential end user market and the continuing development of the industry.

Who really pays for urban infrastructure? : the impact of developer infrastructure charges on housing affordability in Brisbane, Australia

This thesis advances the understanding of the impact of developer infrastructure charges on housing affordability in Brisbane, Australia through the development of an econometric model and empirical analysis. The results indicate substantial on-passing of these government charges to purchasers of both new and existing homes, thus negatively impacting housing affordability across the whole community. The results of this thesis will inform policy makers and assist in the development of evidence based policy related to housing affordability and funding of urban infrastructure. Being generic, the econometric model is expected to be a tool that is suitable for estimating similar house price effects in other housing markets.

Neighborhood sustainability assessment : evaluating residential development sustainability in a developing country context

Rapid urbanization, improved quality of life, and diversified lifestyle options have collectively led to an escalation in housing demand in our cities, where residential areas, as the largest portion of urban land use type, play a critical role in the formation of sustainable cities. To date there has been limited research to ascertain residential development layouts that provide a more sustainable urban outcome. This paper aims to evaluate and compare sustainability levels of residential types by focusing on their layouts. The paper scrutinizes three different development types in a developing country context—i.e., subdivision, piecemeal, and master-planned developments. This study develops a “Neighborhood Sustainability Assessment” tool and applies it to compare their sustainability levels in Ipoh, Malaysia. The analysis finds that the master-planned development, amongst the investigated case studies, possesses the potential to produce higher levels of sustainability outcomes. The results reveal insights and evidence for policymakers, planners, development agencies and researchers; advocate further studies on neighborhood-level sustainability analysis, and; emphasize the need for collective efforts and an effective process in achieving neighborhood sustainability and sustainable city formation.

Developer charges and housing affordabilty in Brisbane, Australia

Purpose - This paper empirically examines the effect of developer charges on housing affordability in Brisbane, Australia. Developer paid fees or charges are a commonly used mechanism for local governments to pay for new urban infrastructure. Despite numerous government reports and many years of industry advocacy, there remains no empirical evidence in Australia to confirm or quantify passing on of these charges to home buyers. Design/methodology/approach - This research applies a hedonic house price model to 4,699 new and 25,053 existing house sales in Brisbane from 2005 to 2011. Findings – The findings of is research are consistent with international studies that support the proposition that developer charges are over passed. This study has provided evidence that suggest developer charges are over passed to both new and existing homes in the order of around 400%. Research limitations/implications - These findings suggest that developer charges are thus a significant contributor to increasing house prices and reduced housing affordability. Practical/Social Implications: By testing this effect on both new and existing homes, this research provides evidence in support of the proposition that not only are developer charges over passed to new home buyers but also to buyers of existing homes. Thus the price inflationary effect of these developer charges are being felt by all home buyers across the community, resulting in increased mortgage repayments of close to $1000 per month. Originality/value - This is the first study to empirically examine the impact of developer charges on house prices in Australia. These results are important as they will inform governments on the outcomes of growth management strategies on housing affordability, providing the first evidence of its kind in Australia.

An Uber for apartments could solve some common housing problems

Speculative property developers, criticised for building dog boxes and the slums of tomorrow, are generally hated by urban planners and the public alike. But the doors of state governments are seemingly always open to developers and their lobbyists. Politicians find it hard to say no to the demands of the development industry for concessions because of the contribution housing construction makes to the economic bottom line and because there is a need for well located housing. New supply is also seen as a solution to declining housing affordability. Classical economic theory however is too simplistic for housing supply. Instead, an offshoot of Game Theory - Market Design – not only offers greater insight into apartment supply but also can simultaneously address price, design and quality issues. New research reveals the most significant risk in residential development is settlement risk – when buyers fail to proceed with their purchase despite there being a pre-sale contract. At the point of settlement, the developer has expended all the project funds only to see forecast revenue evaporate. While new buyers may be found, this process is likely to strip the profitability out of the project. As the global financial crisis exposed, buyers are inclined to walk if property values slide. This settlement problem reflects a poor legal mechanism (the pre-sale contract), and a lack of incentive for truthfulness. A second problem is the search costs of finding buyers. At around 10% of project costs, pre-sales are more expensive to developers than finance. This is where Market Design comes in.

Submission to Senate Economics References Committee, An Inquiry in to Affordable Housing

Developer paid fees or infrastructure charges are a commonly used mechanism for local governments to pay for new infrastructure. However, property developers claim that these costs are merely passed on to home buyers, with adverse effects to housing affordability. Despite numerous government reports and many years of industry advocacy, there remains no empirical evidence in Australia to confirm or quantify this passing on effect to home buyers and the consequent effect on housing affordability. Hence there remains no data from which governments can base policy decision on, and the debate continues. This research examines the question of the impact of infrastructure charges on housing affordability in Australia. It employs hedonic regression methods to estimate the impact of infrastructure charges on house prices and vacant lot prices in Brisbane, Australia during 2005-2011, using a data set of 29,752 house sales, comprising 4,699 new house sales and 25,053 existing house sales and 13,739 lot sales. The regression results for the effect of infrastructure charges on house prices in Brisbane indicated that for every $1.00 of infrastructure charge levied on developers, all house prices increase by $3.69 or a 369% overpassing of these government levies onto home buyers. Thus, this one government levy could be responsible for $877 per month on home owner mortgage repayments in Brisbane, Queensland. This research is consistent with international findings, that support the proposition that developer paid infrastructure charges are passed on to home buyers and are a significant contributor to increasing house prices and reduced housing affordability. Understanding who really pays for urban infrastructure is critical to both the housing affordability and infrastructure funding debates in Australia and this research provides the first empirical data for policy makers to assess their policy objectives and outcomes against.

Enhancing information about sustainability features for sustainable housing delivery

Sustainability practices in government regulations and within the society influence the delivery of sustainable housing. The actual delivery rate of Australian sustain-able housing is not as high as other countries. There is an absence of engagement by stakeholders in adopting sustainable housing practices. This may be due, in the current Australian property market, to confusion as to what sustainability features should be considered, given the large range of environmental, economic and social sustainability options possible. One of the main problems appears to be that information demanders, especially real estate agents, valuers, insurance agents and mortgage lenders do not include sustainability perspectives in their advice or in their decision processes. Information distribution in the Australian property market is flawed, resulting in a lack of return-on-investment value of ‘green’ features implemented by some stakeholders. This paper reviewed the global sustainable development concept and Australian sustainable assessment methods. This review identified the possibility of a research project which aimed at identifying and integrating different perceptions and priority needs of the information demanders, for developing a model for the potential implementation of sustainability features distribution in the property industry. This research will reduce confusion on the sustainability-related information which can influence the decision making of stakeholders in the supply and demand of sustainable housing.

Courtyard housing as a subtropical urban design model

Through both theory and practice, this practice-based research develops and tests the idea that courtyard housing can deliver sustainable, compact housing in rapidly growing subtropical cities. It proposes a contemporary urban design model that incorporates urban design courtyard housing prototypes. These prototypes can be further developed by architects and urban designers for similar climatic conditions across the world.

Identifying the financial barriers to deliberative, affordable apartment development in Australia

Purpose The purpose of this paper is to identify the financial barriers to the supply of affordable apartments in Australia and examine whether demand aggregation and ‘deliberative development’ (self-build) can form a new affordable housing ‘structure of provision’. Design/methodology/approach Market design, an offshoot of game theory, is used to analyse the existing apartment development model, with ‘deliberative development’ proposed as an innovative alternative. Semi-structured interviews with residential development financiers are used to evaluate whether deliberative development could obtain the requisite development finance. Findings Our investigation into the financial barriers of a deliberative development model suggest that while there are hurdles, these can be addressed if key risks in the exchange process can be mitigated. Hence, affordability can be enhanced by ‘deliberative development’ replacing the existing speculative development model. Research implications Market design is a new innovative theoretical approach to understanding the supply of housing, offering practical solutions to affordable apartment supply in Australia. Originality/value This research identifies financial barriers to the supply of affordable apartments; introduces theoretical understandings gained from market design as an innovative solution; provides evidence that a new structure of building provision based on ‘deliberative development’ could become a key means of achieving more affordable and better designed apartments.

Making apartments affordable: Moving from speculative to deliberative development

Urban planning policies in Australia presuppose apartments as the new dominant housing type, but much of what the market has delivered is criticised as over-development, and as being generic, poorly-designed, environmentally unsustainable and unaffordable. Policy responses to this problem typically focus on planning regulation and construction costs as the primary issues needing to be addressed in order to increase the supply of quality, affordable apartment housing. In contrast, this paper uses Ball’s (1983) ‘structures of provision’ approach to outline the key processes informing apartment development and identifies a substantial gap in critical understanding of how apartments are developed in Australia. This reveals economic problems not typically considered by policymakers. Using mainstream economic analysis to review the market itself, the authors found high search costs, demand risk, problems with exchange, and lack of competition present key barriers to achieving greater affordability and limit the extent to which ‘speculative’ developers can respond to the preferences of would be owner-occupiers of apartments. The existing development model, which is reliant on capturing uplift in site value, suits investors seeking rental yields in the first instance and capital gains in the second instance, and actively encourages housing price inflation. This is exacerbated by lack of density restrictions, such as have existed in inner Melbourne for many years, which permits greater yields on redevelopment sites. The price of land in the vicinity of such redevelopment sites is pushed up as landholders' expectation of future yield is raised. All too frequently existing redevelopment sites go back onto the market as vendors seek to capture the uplift in site value and exit the project in a risk free manner...

Smarten up! Applying market design theory to housing supply

PROBLEM Cost of delivering medium density apartments impedes supply of new and more affordable housing in established suburbs EXISTING FOCUS - Planning controls - Construction costs, esp labour - Regulation eg sustainability

Achieving medium-high density in low scale development: The Queensland experience in innovative ‘fine-grained’ urbanism

Worldwide population growth and economic agglomeration is driving increasing urban density within larger metropolitan conurbations. Population growth and housing diversity and affordability issues in Queensland have seen an increasing demand for more diverse and higher density development. Under Queensland’s flexible planning regulatory provisions, a level of ‘medium’ to ‘high density’ is being achieved by a focus on fine-grained urban design, low scale development, lot diversity, and delivery of single dwelling products. This for Queensland (and Australia) has been an unprecedented innovation in urban and dwelling design. Dwellings are being delivered on lots with zero regulatory minimum sizes providing for a range of new products including ‘apartments on the ground’. This paper reviews recent and nascent demonstrations of EDQ’s fine-grained urbanism principles, identifiable with historical ‘vernacular suburbanism’. The paper introduces and defines a concept of a ‘natural density’ linking human scale built form with walkability. The paper challenges the notion that (sub)urban development, outside major city centres, needs to be of a higher scale to achieve density and diversity aspirations. ‘Natural density’ provides a means of achieving the increasing demand for more diverse and higher density development.