Housing affordability beyond the sticker shock
Improved infrastructure and more suburban-based jobs could improve housing affordability in Queensland, says the Property Council’s Queensland president Laurence Lancini.
The managing director of Lancini Property and Development, Laurence Lancini has been involved in the property industry for more than three decades, growing his company from a Townsville-based home construction business to a state-wide operation involved in all facets of property development.
While he concedes housing affordability is at crisis point in Sydney and Melbourne, it’s also a “big issue” in Queensland – but for different reasons.
Data from Domain Group shows that 17 suburbs in the Brisbane local government area have a median of $0,000 or less, compared with no suburbs in Sydney.
“But housing affordability isn’t just about the cost of the house. It’s about where the jobs are and how people get to and from the jobs,” he says.
“If someone has to sit in a car or on public transport for two hours a day to get to work and back, there is a significant cost to lifestyle and family life, health and wellbeing – not to mention the drain on the economy.”
The economic cost could be eye-watering, with Infrastructure Australia estimating that traffic congestion could stack up to $53 billion a year by 2031.
Lancini says the solution is a mix of better transport infrastructure to get people to the jobs, and more jobs in the suburbs, so people can work locally.
“A lot of the growth in South East Queensland is happening out in the suburbs,” he says, referring to the Palaszczuk Government’s recently-released regional plan, ShapingSEQ.
The Sunshine State’s population will expand by 1.9 million people over the next 25 years, ShapingSEQ predicts. Brisbane will expand to accommodate 386,800 more people, and the Gold Coast will welcome an extra 351,000. Ipswich’s population will surge by 319,900 and Logan’s by 272,200.
ShapingSEQ finds this population growth will drive demand for 793,700 more dwellings.
But it’s the jobs that has Lancini worried.
“Employment growth is happening mostly in and around our cities. Our arterial roads in South East Queensland are already congested. Unless they can improve public transport, we are going to have a significant problem.”
He points to Ipswich, which will more than double its population and add 111,700 new dwellings over the next 25 years. The city will only support a predicted 128,800 jobs.
Technological innovation, greater density and better transport networks all play roles in supporting employment growth, but at its core, “we need more jobs closer to homes”.
Lancini also wants to see more money spent on infrastructure to “unlock economic activity, create jobs and build confidence”.
“The property industry is the biggest employer in Queensland. If our government doesn’t follow the lead of New South Wales and Victoria, by recycling our assets and investing in new infrastructure, where are the jobs going to come from?” he asks.
“There is no doubt, when you look at the prices in our southern states, home owners can sell up and move to Queensland, buy something similar for half the price and put some money in their pockets.
“This is great for Queensland. But are these people going to be looking for jobs? Or will they all be retirees?”
But there’s another home ownership issue on the horizon that Lancini says the industry must wrap its head around.
“I think millennials will take a completely different view of home ownership.
“Those of us in the property industry think owning our own home is the greatest thing in the world – and I certainly do – but the way millennials live, work and play is so different to previous generations.
“Many won’t be bothered with owning a house, because they want the lifestyle today, rather than the investment tomorrow.
“Millennials are very intelligent, but their work ethic is different, they are more inclined to move from job to job, and they might not be willing to work for 30 years to service a mortgage.”
It’s for this reason that Lancini believes the build to rent asset class will expand in the coming years.
The industry will need to reinvent itself again to meet the changing market, but that’s something that Lancini has done over his 36-year career.
“I’ve been in the property industry since the day I left school,” he says.
An apprenticeship in bricklaying combined with a good work ethic and an entrepreneurial eye, led Lancini to initially create a small house building business.
“I’ve had to reinvent my business many times over the years because of the changing dynamics in the industry. I’ve changed from market to market, and expanded into other geographies.”
He’s made many sacrifices along the way – living frugally in the early days to build up his property portfolio so that he could have a recurring income during the lean times in the construction cycle.
What’s his advice to the young guns?
“For me success has been a gradual process. Hard work combined with a collaborative team effort.
“I love our industry. It’s exciting and forever changing with various market sectors, which brings diversity and challenge. And there are great people. Really, property is all about people.”