Are governments helping or hindering development?

Governments in Australia have struggled with the planning and regulation of major cities, particularly over the last 30 years. Of the top 10 most liveable cities in the world, four of them are in Australia. That’s a fantastic claim to fame.  Unfortunately, we also hold the title for having four of the world’s most expensive cities to live in.  Not so good.

This has happened because of the way we regulate our cities.  Historically, the structure and frameworks have delivered good outcomes but at a great cost.  Housing prices are very very high.

As Australian labour markets begin to merge globally, what we’re starting to see is that it’s very hard for Australian businesses to compete globally, particularly small online businesses with higher costs.

So now we need to begin to think through regulatory frameworks that actually can deliver shelter and office space and industrial floor space, but at globally competitive levels, while retaining our world-class liveable cities.

That tells me that we need to reinvent our land use and regulatory frameworks.  We need smaller investors to be able to build home units and to redevelop their houses in very sensible ways, but without high costs and without having to go to land and environment courts to seek outcomes. We need to be able to encourage development and redevelopment to occur in non-adversarial ways.

We need far more certainty in the development approvals process, and more certainty in major high-rise living developments.

While there are big issues that need to be dealt with around the built form, there are also major issues to be addressed around the supply of residential land.

Victoria is the only state in Australia which really regulates and ensures that there are high levels of supply.  Because of this, prices remain at a reasonable level.  For example, the median greenfield land price in Melbourne is $211,000.  In Sydney, it’s almost double that at around $405,000.  And that’s just because of Victoria’s regulatory framework.

So what are the practical responses to the situation?  How can the government help, rather than hinder, development?

We need a far more active role from the federal government, particularly with the early provision of infrastructure.  Infrastructure is key to attracting businesses to invest in new locations.  It is key to providing employment and attracting a workforce.  And it is key to the decisions people make about where to live and the kind of housing they want to live in.

The early provision of infrastructure allows us to build cities that are not car-dependent.  A good example of this is the future planning of western Sydney, where there is a proposed rail line to Badgery’s Creek airport.  It would make sense to build that rail line, upfront, allowing people to purchase homes close to the line.  Knowing they will have immediate access to the service means there is no need for them to purchase two or three family cars.  Once you are car dependent, your lifestyle preferences actually alter.

We need to integrate infrastructure with regulatory frameworks and strategic land use frameworks.  Government has a big role to play in encouraging great development.

About the author: 

Brian Haratsis is MacroPlan’s Founder and Executive Chairman. Brian is an economist and future strategist with over 30 years experience as an advisor to governments and major corporate clients throughout Australia and New Zealand. For more information or to discuss your property research requirements, please contact Amy Williams on 02 9221 5211 or