Residential Market Geography – Submarkets and Segments

Joel Taylor: General Manager, QLD and NT It is my sound belief that residential growth is not created by urban development but rather facilitated by it.  I know this sounds a bit philosophical but by first applying a principles approach, I feel that we can address the fundamental questions:

  • Who is the market?
  • What is needed?
  • When is the right timing?
  • What is the appropriate sizing?
  • Overall, how do we maintain efficient land markets nationally?

I am guided in some ways by the visioning and market insights offered by Brian’s new book, which address a range of these issues. On a project by project basis however I am challenged by meeting an increasingly diverse range of consumer segments, particularly within S.E. Queensland.

Working with Alex O’Reilly and Carla Witchard (QLD Economists) on a couple of recent projects across Brisbane’s fringe, we found a range of positive development outcomes can be facilitated by competitive and efficient housing delivery. The key principle related to the creation of multiple and varied development fronts, based upon and/ or measured by the composition of relevant consumer segments.  This analysis approach sets a basis for long-term decisions around the master planned transit orientated outcomes, competitive pricing and product choice.

By looking at past patterns we were also able to predict with some certainty likely future trends. In the following I discuss how seemingly simple population growth forecasts can develop into a more complex but ‘true’ understanding of the land release pathway for an emerging area.

The feel for an area can be read quite quickly using building activity metrics such as approvals, completions and stock - Where is it? What type? and How much?  In the residential game, these effectively act as a barometer for housing tastes and preferences.  In fringe development areas, the relative quantum of approvals is generally high with growth in these regions forming part of an urbanisation process which expands development outward from Brisbane.

This same outward growth sequence has existed for decades and - planning aspirations aside - will continue. The new evolutionary factor however is the progression in thinking about urban development from a continuous urban form to a series of urban nodes/ villages with inter-urban breaks. Master planned developments can create this by design, in some instances the profile of migration, economic conditions and policy guide this outcome.

Average annual buildings approvals by LGA

Linked to future building activity levels in our case study is the level of residential growth. The latest forecasts provided the ABS estimate Australia's to increase to between 36.8 and 48.3 million people by 2061, which would generate a demand for approximately 115,00 – 210,000 dwellings per annum (based on 2.5 persons per dwelling).

Marrying this growth to a unique set of land markets based on the nature of location can be understood in terms of geographic boundaries, such as suburbs or towns. My view is that successful developments need to demonstrate this understanding in terms of respective residential market geography.

The unique drivers that influence a purchasing decision - including locational characteristics such as jobs, price or family networks - for residential consumers will over the long-term create a sub-market effect.

For example, the major transport routes running north-south along the SEQ coastline and westward to Ipswich play a pivotal role in the formation of distributed geographically separated residential communities. To carry our Brisbane example through, the range of market segments continue to vary as urban development radiates from Brisbane City along these routes. The ‘fringe’ housing sub-market comprises commuter-oriented development while, further away, the Gold Coast, Sunshine Coast and hinterland form a series of lifestyle markets. We have DINKS, international visitors and student populations competing in areas with high access to the CBD and not always in high amenity locations.


Following the principle that growth is facilitated through the provision of land for urban development, our solutions to urban growth become apparent.

A model for efficient urban development delivery needs to be based on socio-demographic distinctions such as ‘greenfield’, ‘transit-based’, ‘work-based’, ‘amenity based’, etc and presented as such. Through a series of case studies, MacroPlan have set ourselves the task of sizing and proving the range of market segments using a set of established case studies.

Our ‘neatest’ example of this was the identification of two typical and distinct SEQ markets namely ‘greenfield’ and ‘transit-oriented developments’ (or ‘TODs’). These markets emerged based on the impact of proximity to rail and highway infrastructure, and its associated impact upon the purchasing decision process for home-buyers, particularly in fringe and price sensitive areas.

In our research it was observed that local markets not only have growth-push drivers (as discussed above), but also typology drivers and can be developed in compliment to one another. For example, the recent developments of Fitzgibbon Chase and Warner Lakes have occurred in a similar locality, at the same time but serving different consumers, i.e. a rail consumer and a greenfield consumer. This trend has been observed as currently continuing with the development of Narangba and Dakabin areas.

In all pair-wise comparisons there were consistent variations in age, income and ownership profile categories and as such, MacroPlan  were able to validate the existence of sub-markets and a pattern of transitional purchasing as residents in the LGA increase in age and wealth.  The requirement for accommodating multiple development fronts also has implications for the delivery of timely and competitively priced land supply.  A range of strategic planning responses are required such as a new approach to planning for and managing growth.

A greater understanding of the sub-markets and segments is required to deliver for a distinct set of markets which, if not supported, will defer their housing purchase or delete it. Moreover, an absence of multiple growth fronts may impact on our ability to meet population growth forecasts and hurt the building industry.