This report investigates the rate of lot sales in nine major master-planned housing developments. The research reveals a staged release approach that responds to price growth, but appears crafted to avoid supply-led price declines. Based on these findings, Australia cannot rezone its way to affordability.

After an average 9.5 years of production time, these Master Planned Communities (MPCs) still held 76.2% of their land bank vacant across all forms of permitted housing. Instead of prices falling with the supply capacities at hand, the average land price inflation rate was 5.5% annually in real terms i.e. after subtracting CPI. Wage growth ran at only 2.4%, some 55% less than the land price increase.

At average sales rates, the expected total development time frame will be 40 years, well above the stated aim of 20 years.

The analysis undertaken in the report provides insights into the strategies of developers in terms of:

• the speed at which properties are released to the market (in stages),
• what determines those sales rates, and
• the resultant pricing outcomes.

The complete record of over 25,000 sales in these nine sample subdivisions was analysed, revealing that sale rates in these large approved MPCs vary significantly according to market conditions. Markedly higher sales occurred when the market was running hot (mid 2015-mid 2017) compared to when the market cooled (18-19). The rate of sales, and hence the rate of new dwelling development, contracted 48.7% between the two periods as the promise of supply-led affordability was held at bay.

Other notable findings:

• Average lot sale prices increased $194,010 across these projects
• The rate of sales between boom and bust periods varied by a factor of 41.4%
• Yearly supply rates were delivered at a median of 3.4% of total lots approved.