Mar 30, 2022 | ,

Celsius Land – Structure Planning and the Land Market

The start of 2022 has been a challenging 3 months with ongoing cost increases and a shortage of labour on all fronts. Consultants suffering from Covid or being in isolation has certainly slowed things down over the past month.

Celsius Land is currently managing four projects which are all in the town planning phase. Three of these projects are at various stages of the structure planning process. I was asked recently what a structure plan is so, given our projects spend so much time going through this process, I thought I would take the opportunity to explain it in this newsletter. Structure plans are the process where all of the site opportunities and constraints (such as environmental, traffic and bushfire) are considered to prepare a high level land use plan and road network. This area could range anywhere from 5 hectares to 200 hectares and often involves multiple land owners.

These landowners will work collaboratively with each other, the local government authority and State government authorities to complete the relevant background studies and prepare a plan.  If the structure plan has a public interest component then the local community may also be engaged in providing input into the plan.  The structure plan will define the locations of important uses such as schools, public open space, important transport links and environmentally sensitive vegetation areas. The structure plan then defines a basis for the subdivision of the land, which is a simpler process that follows.

We are certainly looking forward to obtaining planning approvals on these four projects and commencing construction. In this regard, the civil construction market is very hot at the moment with a shortage of labour and materials resulting in contractors not being able to commit to start dates on new jobs and costs continuing to increase.

In March this year the Urban Development Institute of Australia released research showing that the average price of a block of land in the Perth Greenfield market was unchanged in 2021 at $215,000 and was still 12% lower (on a square meter basis) than it was in 2015 when WA’s land prices peaked.  Whilst established house prices increased in 2021; the additional cost to new housing has effectively absorbed all of the price increase for a house and land package.  More recently in 2022 there have been some prices rises in areas that Celsius is managing land developments and we feel there is scope for further price rises this year which, as a land developer, are needed to offset increasing construction costs.

Brenton Downing