SEQ dwelling approvals slump as population growth hits post-Covid high

Market Insights
4 weeks ago
4 minutes

The urgency to address the housing crisis facing South-East Queensland has been laid bare by the latest RPM Group report which shows a significant fall in dwelling approvals over the past year meeting a massive spike in population growth which hit a post-COVID high in 2023. 

The pressures have been so great that demand has driven double-digit gains for apartment prices and residential land in the Greater Brisbane region over the past year.

RPM’s South-East Queensland Greenfield Market Report - May has revealed a concerning 28 per cent slump in apartment approvals has been compounded by an 8 per cent drop in detached dwelling approvals and a 2.5 per cent fall in townhouse approvals in 2023. 

The state’s population growing by 143,000 people is the highest net increase in population since the interstate and international floodgates were open after the pandemic in 2021. 

Under the SEQ Regional Plan, to meet the heightened demand, an average of 34,552 dwellings are required each year between 2021 and 2046, a currently unattainable effort with approvals falling to just above 32,000 for dwellings. Additionally, production is well short of targets and only 18,783 new dwelling lots were registered in SEQ in the year to March 2024.

The net increase in population, primarily driven by an expanding wave of migration, was 23 per cent higher than the previous year.

RPM’s Queensland Managing Director Clinton Trezise says the latest data highlights the urgency of bringing more housing to the market sooner to meet the rising pace of the state’s 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,” said Mr Trezise.

“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 - May covers the region from the Sunshine Coast to the Gold Coast and west to Scenic Rim and Toowoomba. 

The region saw a 13.1 per cent fall in approvals over 2023 to 32,453 dwellings – or 4,895 fewer than the year before.

Apartments took the biggest hit, slumping by 2,972 approvals to 7,535, while the number of house approvals was down 1,811 to 20,594. Townhouse approvals were relatively steady, dipping by just 112 to 4,324.

At the same time, the median house price in the Greater Brisbane area rose 7 per cent to $824,000 last year, while the median for apartments rose 13.3 per cent to $555,000 and for land 13.6 per cent 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,” said Mr Trezise.

“Apartment prices have been hit on two fronts – a lack of supply and rising costs. 

"The report also highlights while there has been significant price increases in vacant land and build prices, new house and land packages still remain a relatively affordable option for buyers when 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.

"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.” 

Mr Trezise said that while record immigration numbers are expected to ease in coming years, they will remain at elevated levels in the near term and continue to drive price growth in South-East Queensland.

“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,” he 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.”