LAND supply shortage across the region has prompted a review to pave the way for future population and housing development.
Detailed analysis is being undertaken by Corangamite Shire Council of housing land in Camperdown, Cobden and Terang to plan for the district's growth.
The pandemic has had an unexpected side effect on the property market, driving a surge in the local and regional property.
The towns have been identified as the three primary locations of the shire to capitalise on future residential housing and development and cater for population growth.
Recent research into worker housing in the shire found the onset of COVID-19 has disrupted the property market and resulted in an upswing of residential property prices, including in regional areas.
This has been underpinned by positive economic conditions and low mortgage interest rates.
As a result, the property market has accelerated much faster and higher than modelled under normal conditions.
Mayor Ruth Gstrein said the review would help council plan for housing and residential growth.
"The property market has been surging as COVID-19 prompts city buyers to look to the regions," Cr Gstrein said.
"We need to make sure there are still opportunities for locals, and capacity to attract and house key workers for our critical agriculture, tourism and energy industries."
The council is looking to engage with landowners in these townships interested in developing their land.
Land ownership constraining supply
Analysis shows that over half of the candidate development sites in the Corangamite Shire have been in the same ownership for over 10 years.
Productivity, limited financial gain and rural location have presented barriers for landowners to sell or develop their land.
Subdivision data shows that the majority of new lots are created through two lot subdivision, instead of large-scale residential development.
Supply has been constraining demand, with new housing permits outstripping lot creation.
Limited subdivision and new lot creation have impacted Cobden and Terang in particular, highlighting the constrained availability of vacant land.
Infrastructure needs hindering development
Infrastructure needs are creating barriers to development, with agencies like Wannon Water reporting that high upfront costs are providing a disincentive, as well as impacting development viability.
Sewer and water limitations are the most commonly identified barrier. A new sewer pump to service development will cost approximately $150,000 - $200,000, plus additional costs for rising mains - around $250 per metre.
These can pose significant cost barriers for development, particularly small-scale subdivision.
Requirements for upfront delivery of infrastructure such as roads and drainage systems, further compounds development viability.
Land supply at "critical levels"
Market ready land supply is heavily constrained across the Corangamite Shire.
While there appears to be a significant supply of zoned and vacant residential land across the towns, market ready supply equates to around 4.8 per cent of existing houses in Camperdown, 10.6 per cent in Cobden and 5.3 per cent in Terang.
Landownership and fragmentation pose a further barrier to market ready supply, leaving land supply at "critical levels", says Cr Ruth Gstrein.
Population problem: low interest or not enough housing?
The shire has historically low population growth.
In Camperdown growth rates have been 0.26 per cent per year, Cobden 0.65 per cent and Terang 0.19 per cent.
The report asks the question: is low population due to low interest, or a shortage of housing?
Land supply limitations for new housing appear to have historically impacted population growth and could constrain future growth over the short and medium-term.
Uplift in housing demand
Recent data measures suggest there has been an increase in activity in the housing market over the past five years, which has been accelerated by COVID-19.
Real estate agents across the shire say the housing market has performed strongly through the second half of 2020 and into 2021, reflecting broader regional housing market trends.
Shifting lifestyle preferences and working behaviours - including greater ability to work remotely - has increased regional migration.
Whether this spike is temporary or permanent remains to be seen, however the council says it's critical to plan proactively for demand.
Rental housing in short supply
Data shows the supply of rental housing has been declining, whilst pricing has increased, impacting the availability of housing for new residents and key workers.
Median house prices for Camperdown, Cobden and Terang have been following regional growth trends, but still sit below the regional Victorian average, making housing still relatively affordable.
However, house prices and land values also influence development viability, impacting upon profitability and a willingness of owners to develop.
Housing choice is also limited in the Corangamite Shire and the council has identified a need to provide more options to cater for more people, including young families, home builders, retirees, downsizers and smaller dwellings for the rental market - such as key and temporary workers.
The delivery of market ready land for housing within Camperdown, Cobden and Terang is reaching a "critical point", Central Ward Cr Laurie Hickey said.
"It has certainly been identified as a limiting factor within our agricultural industry in that attracting skilled people to the to the region and providing houses for them when they get here is one of the more critical developments as far as the industry is concerned," Cr Hickey said.
"This development in will lead to economic growth and as we have more tree changers come along to the region we need to open up our land.
"This review is very important."
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