Cape Paterson
Residential Land Assessment
Prepared for Wallis Watson Cape Paterson Pty Ltd
December 2019 | 3190484
Authorship
Report stage Author Date Review Date
Nick Brisbane, Rajiv Draft report 10/12/2019 Chris McNeill 12/12/2019 Mahendran Final report Nick Brisbane 13/12/2019
Disclaimer Every effort has been made to ensure the accuracy of the material and the integrity of the analysis presented in this report. However, Ethos Urban Pty Ltd accepts no liability for any actions taken based on report contents.
Contact details For further details please contact Ethos Urban Pty Ltd at one of our offices:
Ethos Urban Pty Ltd ABN 13 615 087 931
Level 8, 30 Collins Street 173 Sussex Street Level 4, 215 Adelaide Street Melbourne VIC 3000 Sydney NSW 2000 Brisbane QLD 4000
(03) 9419 7226 (02) 9956 6962 (07) 3852 1822 [email protected] www.ethosurban.com
Our Reference: 3190484
Cape Paterson
Residential Land Assessment
Contents
Introduction 1
1 Locational Context and Proposed Rezoning 2 2 Policy Context 5
2.1 Gippsland Regional Growth Plan 5
2.2 Bass Coast Planning Scheme 6
2.3 Bass Coast Distinctive Areas and Landscape Assessment 6
3 Population and Demographic Trends 8
3.1 Bass Coast Population Trends and Forecasts 8
3.2 Population Trends in Cape Paterson and Coastal Towns 9
3.3 Demographic Characteristics 10
3.4 Conclusion 10
4 Residential Land Supply 12
4.1 Established Residential Areas in Cape Paterson 12
4.2 ‘The Cape’ Eco Village 12
4.3 Conclusion: Residential Lot Supply in Cape Paterson 13
5 Residential Land Demand 15
5.1 Bass Coast Residential Land Assessment 2017/18 15
5.2 Bass Coast Building Approvals Trends 16
5.3 Residential Property Sales Trends 16
5.4 Trends in Property Prices and Land Prices 18
5.5 Residential Land Development Trends in Cape Paterson 18
5.6 Net Dwelling Change, 2011 - 2016 19
5.7 Forecast Dwelling Demand 19
5.8 Conclusion: Implications on Residential Land Supply 20
6 Economic Considerations for Proposed Rezoning 22
7 Conclusion 23
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Introduction
Background
Wallis Watson Cape Paterson Pty Ltd (the ‘client’) own land to the north of the existing Cape Paterson township and are proposing a rezoning of the land and adjoining parcels of land from the Farm Zone (FZ) to the General Residential Zone (GRZ1). The Subject Site is identified for future residential development in the Bass Coast Planning Scheme.
The Subject Site is approximately 53ha in size and is planned to accommodate approximately 480 residential lots. The rezoning will provide for the long-term residential land supply requirements in Cape Paterson.
Essential Economics Pty Ltd (now Ethos Urban) prepared a report titled ‘Cape Paterson Residential Land Assessment’ for the client in 2016. Bass Coast Shire Council has requested this report be updated to ensure it reflects the latest socio-economic data and current market conditions. This report represents the updated Cape Paterson Residential Land Assessment and will accompany the planning application for the proposed rezoning.
This report provides an assessment of the residential land market at Cape Paterson, including an analysis of residential land demand and supply factors.
This Report
This report contains the following chapters:
Chapter 1: Locational Context and Proposed Rezoning
Chapter 2: Policy Context
Chapter 3: Population and Demographic Trends
Chapter 4: Residential Land Supply
Chapter 5: Residential Land Demand
Chapter 6: Economic Considerations for Proposed Rezoning
Chapter 7: Conclusion
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1 Locational Context and Proposed Rezoning
Cape Paterson is one of Bass Coast Shire’s smaller coastal townships and has an estimated 2018 permanent resident population of approximately 900 persons (ABS). The town is located 7km south of Wonthaggi, yet still maintains a non-commercial, secluded ‘coastal’ feel with low-scale residential development nestled into native vegetation.
The regional location of Cape Paterson is shown in Figure 1.1.
The town contains a caravan park and a small town centre, which includes a general store and a tavern. A large portion of Commercial Zoned land in the town centre is currently vacant.
Cape Paterson now comprises two distinct residential areas and these are shown in Figure 1.2. The established part of the township is almost fully built out with the latest residential estate, the ‘Golden Cape Estate’, nearing completion. To the west of the established township is ‘The Cape’ eco-village, which will contain 219 residential lots. This land was rezoned in 2011 to accommodate the eco- village development and represents ‘niche’ residential and tourism development to date, with 36 dwellings have either been constructed or are under-construction.
Cape Paterson is a popular holiday home location, as indicated by 65% of dwellings being unoccupied at the time of the 2016 ABS Census of Population and Housing. The enhanced popularity of coastal towns for holiday homes and lifestyle purposes has increased the need for the provision of more residential zoned land in the Bass Coast Shire’s coastal towns. Cape Paterson, and the Subject Site in particular, is a location well situated to accommodate a share of future residential demand having regard for its proximity to the facilities and services provided in nearby Wonthaggi.
The Subject Site is located to the north of the existing township, as shown in Figure 1.2, and has a total area of approximately 53ha. The southern boundary of the site is accessible from Seaward Drive while access to the site will also be available from Cape Paterson Road to the east.
The rezoning will allow for the development of 480 residential lots, ranging in size from conventional residential house blocks in the order of 500m² to larger lots of more than 1,000m².
The Future Urban Structure for the Subject Site is shown in Figure 1.3.
Subject Site – Facing North from Seaward Drive
Source: Ethos Urban (December 2019)
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Figure 1.1: Regional Location
Source: Ethos Urban using MapInfo and BingMaps
Figure 1.2: Subject Site Location
Source: Ethos Urban using MapInfo
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Figure 1.3: Subject Site Future Urban Structure
Source: Wallis Watson Cape Paterson
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2 Policy Context
This Chapter provides an overview of the State and local government policy and strategic assessments relevant to the proposed rezoning of the Subject Site.
2.1 Gippsland Regional Growth Plan
The Gippsland Regional Growth Plan (2014) provides broad direction for land use and development for the wider Gippsland region, which includes Bass Coast Shire. Cape Paterson is identified as ‘secondary centre’ in the Regional Plan that will rely on the nearby services provided in Wonthaggi and Inverloch. The Regional Plan ‘supports proposals for medium scale growth consistent with local plans’ in Cape Paterson.
To this extent, the proposed rezoning is consistent with the Cape Paterson Strategic Framework Plan, as described in Clause 21.09-7 of the Bass Coast Planning Scheme. The Framework Plan, shown in Figure 2.1, identifies the Subject Site for future short-term and long-terms residential uses.
Figure 2.1: Cape Paterson Strategic Framework Plan
Source: Bass Coast Planning Scheme (Clause 21.09-7)
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2.2 Bass Coast Planning Scheme
Clause 21.09-7 of the Bass Coast Planning Scheme provides the following description of the Cape Paterson settlement:
“Cape Paterson structure plan establishes a clear direction for the future physical form of Cape Paterson in that it defines a town boundary for residential development and precincts for consolidated commercial areas.
Cape Paterson is a small to medium sized settlement, nestled between rural landscapes and the Cape Paterson Foreshore Reserve and Bunurong Marine Park. Traditionally a holiday/recreational coastal village, it now has an increasing permanent population. Minimal commercial facilities predominantly service the local population and holiday visitors. It has a generous foreshore reserve that includes the caravan park as a major asset set among native coastal vegetation and some mature exotic vegetation. Community facilities are disparate and not well connected.”
The Subject Site is identified in the Cape Paterson Strategic Framework Plan at ‘short term’ residential with the intention for the and to be rezoned from the Farm Zone to Residential 1 Zone (now the General Residential Zone).
Having regard for the above, the proposed rezoning is supported by the Bass Coast Planning Scheme.
2.3 Bass Coast Distinctive Areas and Landscape Assessment
In October 2019, Bass Coast was declared a Distinctive Area and Landscape (DAL) under the Planning and Environment Act 1987. The declaration triggered the requirement to prepare a Statement of Planning Policy. The declaration area is the entire municipal district of Bass Coast Shire, refer to Figure 1.1.
The Department of Environment, Land, Water and Planning (DELWP) is working in collaboration with the Bass Coast Shire Council, and Traditional Owners, the Bunurong People in preparing the draft State of Planning Policy, with input from local communities and other key stakeholders.
The Statement of Planning Policy (SPP) will provide the strongest level of planning protection and:
• Set out a 50-year vision which identifies the values and attributes to be protected and enhanced.
• Set out the long-term needs for the integration of decision making and planning for the declared area.
• Include a declared area framework plan that integrates environmental, social, cultural and economic factors, encourages sustainable development and identifies areas to be protected and conserved.
The Statement of Planning Policy will consider development controls and identify settlement boundaries to ensure appropriate development that does not encroach on valued natural and rural landscapes. These boundaries will have similar protections to metropolitan Melbourne’s Urban Growth Boundary (UGB) and will require parliamentary approval to amend settlement boundaries.
It is understood, the Statement of Planning Policy will build on and be informed by strategic planning work already undertaken in Bass Coast.
To this extent, the Subject Site has already been identified as be suitable for rezoning to accommodate residential development in the Cape Paterson Strategic Framework Plan. On this
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basis, it is unlikely the Subject Site will be impacted by the DAL review. However, potential may exist for other areas in Bass Coast to be identified as being not suitable for residential development which may limit the future supply of the residential land throughout the municipality.
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3 Population and Demographic Trends
This Chapter explores recent population growth trends in Cape Paterson and in the Bass Coast Shire, comparing these to growth trends for regional Victoria. These population trends indicate a continuation of strong population growth for the Bass Coast Shire. An overview of the demographic characteristics of Cape Paterson residents is also provided.
3.1 Bass Coast Population Trends and Forecasts
Considerable population growth has occurred in the Bass Coast Shire in recent years, increasing form approximately 27,980 persons in 2008 to approximately 35,330 persons in 2018. Population growth has been influenced by continued demand for coastal living (i.e. sea-change) and driven by growth in the number of people who are seeking lifestyle changes beyond metropolitan Melbourne. Bass Coast’s coastal towns have therefore accommodated a large proportion of population growth in recent years (refer Section 3.2). Wonthaggi, being the main service centre and employment location in Bass Coast has also been a location where strong population growth has occurred.
The Shire experienced average population growth of +2.4% per annum over the period 2008-2018, as shown in Table 3.1. The population growth rate in the Shire has been significantly higher than regional Victoria, which recorded an average annual growth rate of +1.2% for the same period. These growth trends reinforce the strength of Bass Coast and its coastal towns as locations for population growth.
Table 3.1: Population Trends, 2008-2018 Annual Growth
2008 - 2018 Location 2008 2013 2018 (no.) (%) Wonthaggi - Inverloch 18,890 21,180 23,680 480 2.3% Bass Coast (S) 27,980 31,330 35,330 740 2.4% Regional Victoria 1,324,940 1,402,600 1,497,330 17,240 1.2% Source: ABS, Regional Population Growth (3218.0)
The following two sets of population forecasts have been prepared for the Bass Coast Shire:
• Victoria in Future 2019 (VIF2019), prepared by the Department of Environment, Land, Water and Planning (DELWP)
• Forecasts prepared by i.d. Consulting on behalf of Bass Coast Shire Council in 2017 (rebased using the 2018 estimated resident population from the ABS).
Both VIF2019 and id Consulting data forecast moderate population growth in Bass Coast Shire.
VIF2019 projects average population growth in Bass Coast of +1.7% pa over the 2018 to 2036 period. The VIF2019 projection is consistent with the id forecasts which also anticipates population growth of +1.7% pa. While the two forecasts differ slightly, they provide an indication that strong population growth is likely to continue in Bass Coast, which in turn will contribute to demand for residential housing and residential land.
A comparison of the two sets of population forecasts for Bass Coast Shire is shown in Table 3.2.
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Table 3.2: Comparison of Population Forecasts for Bass Coast, 2018-2036
Annual Growth
2008 - 2036 Forecasts 2018 2021 2026 2031 2036 (no.) (%) Victoria In 35,330 37,660 41,210 44,810 48,140 710 1.73% Future 2019 Id Consulting 35,330 37,060 40,000 43,700 47,690 690 1.68% Regional 1,497,330 1,555,790 1,651,850 1,746,970 1,838,640 18,960 1.15% Victoria Source: ABS, Regional Population Growth (3218.0); DELWP, Victoria in the Future, 2019; id Consulting; Ethos Urban
3.2 Population Trends in Cape Paterson and Coastal Towns
The popularity of Bass Coast’s coastal towns as permanent residential locations is illustrated by the strong growth in the estimated resident population over recent years, as shown in Table 3.3.
Table 3.3: Population Trends in Bass Coast Shire Coastal Towns, 2008-2018 Annual Growth
2008 - 2018 Location 2008 2013 2018 (no.) (%) Cape Paterson 690 790 900 20 2.7% Corinella - Coronet Bay 1,230 1,440 1,580 40 2.5% Cowes - Ventnor - Silverleaves 4,710 5,260 6,290 160 2.9% Inverloch 4,040 4,770 5,420 140 3.0% Kilcunda 320 330 370 10 1.5% Rhyll - Surf Beach - Smiths Beach 3,180 3,510 3,750 60 1.7% - Cape Woolamai - Newhaven San Remo 1,050 1,140 1,310 30 2.2% Sub-total: Coastal Towns 15,220 17,220 19,620 440 2.6% Balance of Bass Coast (S) 12,760 14,110 15,700 290 2.1% Bass Coast (S) 27,980 31,330 35,330 740 2.4% Regional Victoria 1,324,940 1,402,600 1,497,330 17240 1.2% Source: ABS, Regional Population Growth (3218.0)
The permanent resident population of Bass Coast’s coastal towns (comprising those identified in Table 3.3 above) increased by approximately +4,400 residents since 2008. These coastal towns accommodated a permanent resident population of approximately 15,220 residents in 2008 and this has increased to 19,620 residents in 2018, representing an average annual growth rate of +2.6% per annum.
Over the same period, the population in the balance of Bass Coast increased by +2,940 residents at an average annual growth rate of +2.1% per annum. The coastal towns accounted for 60% of the growth in the permanent resident population in Bass Coast between 2008 and 2018.
Cape Paterson’s population is currently estimated at 900 persons in 2018, having increased from approximately 790 residents in 2013, representing an average annual growth rate of +2.6%.
The increasing popularity of coastal towns as permanent residential locations is one of the major drivers of demand for residential land. The other key driver is the demand for non-permanent residences, or ‘holiday homes’. The demand for holiday homes is not reflected in trends of permanent resident populations.
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3.3 Demographic Characteristics
An overview of the demographic characteristics of the permanent resident population in Cape Paterson is provided in Table 3.4. This data is based on ABS 2016 Census of Population and Housing.
The demographic characteristics shown in Table 3.4 are reflective of a small coastal town that is a popular location for retirees who are living independently.
For instance, Cape Paterson has a high proportion of persons aged between 65 and 84 years, with 28.0% of the population within this age cohort, compared to an average of 17.7% for regional Victoria. Furthermore, Cape Paterson has a comparatively low labour force participation rate of 54.5%, compared to 60.5% for regional Victoria, which also indicates a retiree population.
According to population forecasts prepared by id Consulting for Bass Coast Shire, the population in Bass Coast aged between 65 and 84 years is forecast to increase by approximately +3,230 persons between 2018 and 2036 and this represents 26% of all population growth in the Shire. Therefore, continued growth in the retiree market is expected in Bass Coast, and many of these retirees will seek to live in the Shire’s coastal townships, including Cape Paterson.
Those who are not retired and living in Cape Paterson are more likely to be employed as ‘professionals’, ‘technicians and trade workers’ or ‘community and personal services workers’ compared to regional Victoria (56.1% compared to 44.0%), and have higher household incomes (+8.9%) than regional Victoria.
Another key feature of the demographic information is the low household occupancy rate of only 35.2% compared to 82.9% for regional Victoria. This low occupancy rate reflects that the majority of dwellings in Cape Paterson are used on a non-permanent basis as holiday homes or holiday rentals.
Table 3.4 provides an overview of select demographic characteristics of Cape Paterson residents in 2016.
3.4 Conclusion
Bass Coast has experienced strong growth in its permanent residential population for a number of years with its coastal towns accommodating a large proportion of this growth. Between 2008 and 2018, identified coastal towns in Bass Coast accounted for 60% of the Shire’s growth in its permanent resident population.
Cape Paterson currently has a permanent resident population of approximately 900 residents and is a popular location for retirees. Growth in the number of retirees seeking coastal living opportunities is expected to occur over the coming decades.
While growth in the permanent residential population will drive demand for residential land, demand for holiday homes will also be a key consideration for Cape Paterson where the majority of dwellings are used by non-permanent residents.
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Table 3.4: Demographic Characteristics, Cape Paterson and Bass Coast, 2016 Cape Regional Category Bass Coast (S) Paterson Victoria Income Median household income (annual) $45,610 $48,110 $58,790 Variation from Rest of Vic median -22.4% -18.2% na Age Structure 0-4 years 3.8% 5.1% 5.8% 5-19 years 12.9% 16.1% 18.4% 20-34 years 12.1% 12.2% 16.5% 35-64 years 41.2% 38.9% 38.9% 65-84 years 28.0% 24.3% 17.7% 85 years and over 2.0% 3.5% 2.7% Total persons 840 32,800 1,433,630 Median Age (years) 52.7 49.5 42.2 Household Composition Couple family with no children 34.0% 31.8% 29.1% Couple family with children 17.4% 21.3% 27.3% Couple family - Total 51.4% 53.1% 56.4% One parent family 10.3% 10.5% 10.9% Other families 0.0% 0.7% 0.7% Family Households - Total 61.7% 64.3% 68.0% Lone person household 35.1% 32.9% 29.0% Group Household 3.1% 2.7% 3.0% Dwelling Structure (Occupied Private Dwellings) Separate house 93.8% 91.7% 89.7% Semi-detached, row or terrace house, townhouse etc. 4.0% 5.4% 6.8% Flat, unit or apartment 0.0% 1.5% 2.7% Other dwelling 2.3% 1.3% 0.8% Occupancy rate 35.2% 53.6% 82.9% Average household size 2.0 2.2 2.4 Employment Status Unemployed/ looking for work 7.5% 6.4% 5.9% Labour force participation rate 54.5% 52.8% 60.5% Occupation Managers 13.4% 14.4% 14.6% Professionals 22.9% 15.3% 17.4% Technicians and trades workers 16.8% 17.1% 14.8% Community and personal service workers 16.5% 12.3% 11.8% Clerical and administrative workers 11.0% 10.1% 11.3% Sales workers 9.8% 11.5% 9.7% Machinery operators and drivers 1.2% 5.1% 6.5% Labourers 8.5% 12.4% 12.4% Inadequately described or not stated 0.0% 1.7% 1.6% Source: ABS, Census of Population and Housing, 2016
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4 Residential Land Supply
This Chapter provides an assessment of residential land supply situation in Cape Paterson.
4.1 Established Residential Areas in Cape Paterson
The established residential area in Cape Paterson is situated between Seaward Drive to the north, the coastline to the south, The Cape development to the west and rural areas to the east. This land is zoned General Residential and shown in Figure 4.1.
The Golden Cape Estate was initially released in April 2002 and is nearing full development. Based on aerial photography dated July 2018 (Google Earth) and a field visit in December 2019, a total of 27 vacant lots currently exist in the Golden Cape Estate.
A further 28 vacant residential lots are located throughout the balance of the established residential areas in Cape Paterson. Therefore, a total supply of 55 vacant residential lots are currently located in the established residential area of Cape Paterson.
However, not all of these lots will be available for development at any one time. Vacant residential lots in regional towns are often held for many years without being developed and this may be for a variety of reasons including the following:
• They are used as an extension of yard space for adjoining properties.
• They are being held for the purpose of development at a later date when it suits the individual property owner.
• Properties may have been owned for a long period of time and the owners are considered to be passive investors/property owners who are have not seriously considered selling or developing the property.
• Lots are being held for the purpose of sale at a later date that suits the individual property owner, and/or when property prices reach a certain point.
• Lots being held for family reasons, including being passed down to future generations in the form of inheritance.
Some of the above factors are likely to be relevant to the Cape Paterson residential land market. A review of vacant residential land advertised on www.realestate.com.au and for sale signs seen during site visit shows that only three vacant residential zoned lots are currently (4 December 2019) available for sale in the established area of Cape Paterson.
4.2 ‘The Cape’ Eco Village
An environmentally sustainable residential and tourism development known as ‘The Cape’ has commenced construction on a site covering approximately 40 hectares, directly west of the Golden Cape residential estate. The Cape was rezoned to the Comprehensive Development Zone 1 (CDZ1) in 2011 via Amendment C119 to the Bass Coast Planning Scheme.
The development represents a niche residential/holiday accommodation product and has a strong focus on environment sustainable principles. Key features of ‘The Cape’ include the following:
• Planned to contain a total of 219 residential lots
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• Stage 1 to 3 are currently for sale comprising 125 lots, of which 79 have sold (based on information provided on ‘the Cape’ website), 26 have been developed and 10 are under- construction.
• Land prices range from $180,000-$340,000.
• Lot sizes range from 310m² to 880m².
• Planned to contain a community hub containing recreational, entertainment and health and well-being related uses.
• Will contain a network of pedestrian and cycle paths around the Eco Village leading to the town via Surf Beach Road.
Titles were issued for Stage 1 in mid-2015; since this time a total of 79 lots have sold (or been reserved) in the initial release, representing approximately 20 sales per annum.
Another factor that may impact the sales rates is the particular aspects of the development. ‘The Cape’ is considered to be a ‘niche’ development and differs from a conventional residential sub- division. For instance, a set of design guidelines applies to development in ‘The Cape’ which ensures the vision for an environmentally sustainable development is delivered. Currently, future residents can choose from 10 designs. In addition, roads and communal spaces in ‘The Cape’ are managed by an Owners Corporation, rather than Council.
However, future property buyers may not value the environmental benefits these guidelines provide or may simply not like the 10 designs offered and would prefer to have a greater level autonomy regarding their future housing. Having regard for the limited supply of vacant lots in the established residential areas in Cape Paterson, future residents and investors currently have a limited choice in residential land and housing. The proposed rezoning of the Subject Site would contribute a greater level of housing choice in Cape Paterson.
4.3 Conclusion: Residential Lot Supply in Cape Paterson
A total supply of 245 residential lots (existing and approved) are currently located in Cape Paterson, comprising the following:
• 55 lots in the established area of Cape Paterson
• 190 lots in ‘The Cape’ Eco Village development.
Currently a very limited choice in residential land and housing product exists in Cape Paterson, with only a handful of lots (three lots as of December 2019) in the established township being available for sale. Currently, ‘The Cape’ is the only option for anyone seeking to develop residential property in Cape Paterson. While ‘The Cape’ is considered to be an award winning development in regard to its environmental credentials (the development won Built Environment – Design award at the Premiers Sustainability Awards in 2012), it’s product does not necessarily appeal to a wide cross-section of the market place due to specific design and owners corporation regulations which apply to development across the site.
The proposed rezoning of the Subject Site will provide an additional element of choice in the Cape Paterson residential land market.
Figure 4.1 shows the location of lots developed/under-construction since May 2016 and vacant residential lots in Cape Paterson as of December 2019.
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Figure 4.1: Vacant Residential Lots in Cape Paterson (excludes vacant lots in ‘The Cape’), December 2019
Source: Ethos Urban using MapInfo, StreetPro, Google Earth
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5 Residential Land Demand
This Chapter provides an assessment of trends in residential land demand in Cape Paterson and Bass Coast, including an analysis of building approvals data, house and vacant land prices, and residential market trends.
Forecasts of future demand for residential lots and implications of the proposed rezoning of the Subject Site are also provided.
5.1 Bass Coast Residential Land Assessment 2017/18
Bass Coast Shire recently produced the ‘2017/18 Bass Coast Residential Land Supply and Demand Assessment’ with the aim of providing an assessment of residential land supply across Bass Coast Shire.
The report builds on Council’s Land Supply and Demand Assessment from 2015 and provides updated information regarding the availability of residential land, projected demand and the estimated years of supply currently available.
The report considers Bass Coast Shire as a whole with no specific demand analysis contained for Cape Paterson; however, the findings assist in providing an overarching picture of residential land demand in Bass Coast.
The key findings of the Bass Coast Residential Land Assessment 2017/18 are listed below:
• Total residential dwelling demand is forecast to be between 462 dwellings pa (based on analysis of past trends in Bass Coast building approvals) and 509 dwellings pa (based on the earlier Victorian Government projection series; Victoria in Future 2016).
• The Victoria in Future 2016 dwelling projections comprise the following:
- Annual demand for 361 occupied dwellings
- Annual demand for 148 ‘unoccupied’ dwellings, or holiday homes, representing 29% of annual dwelling growth.
• Total residential lot supply in Bass Coast was estimated at 8,059 lots, comprising 4,050 vacant lots and 4,009 broadhectare residential lots.
• Based on the above data, residential land supply available in Bass Coast as of July 2018 was estimated to be between 15.9 years (based on past trends in building approvals) and 17.4 years based in Victoria in Future, 2016 (VIF2016). The average between these two estimates is 16.6 years.
• Total residential lot supply in Cape Paterson was estimated to be 395 lots, comprising 163 vacant lots and 232 broadhectare lots.
Having regard for the one-and-a-half years since the Bass Coast Residential Land Assessment 2017/18 was undertaken, the supply of residential land in Bass Coast is now likely to be less than 15 years based on VIF2016 (i.e. 15.9 years less 1.5 years = 14.4 years). State planning policy stipulates a requirement for a 15-year supply of residential land (refer Bass Coast Planning Scheme Clause 11.02-1S), on this basis, it is now an opportune time to consider increasing the residential land supply in Bass Coast.
Since the Bass Coast Residential Land Assessment 2017/18 was prepared, Victoria in Future 2019 (VIF2019) projection series has been released by DELWP. For Bass Coast, the revised projections
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indicate an average demand for 581 dwellings a year between 2016 and 2031, or 14% above the forecasts shown in VIF2016 upon which the Bass Coast Residential Land Assessment was based. Using the updated figures from VIF2019, the supply of residential land in Bass Coast is reduced to 13.9 years in 2018, or approximately 13.4 years at present.
Furthermore, it is understood that the land supply in Cape Paterson has been over-stated in the Bass Coast Residential Land Assessment 2017/18, with a double counting of 94 lots. The residential supply identified in Chapter 3 (of this report) reflects an up-to-date estimate of residential land supply in Cape Paterson at a level lower than that identified in the Bass Coast Residential Land Assessment (i.e. 245 lots compared to 395 lots).
5.2 Bass Coast Building Approvals Trends
Bass Coast Shire has averaged approximately 475 new dwelling building approvals per year since 2011/12. However, as shown in Figure 5.1, the number of new dwelling building approvals in Bass Coast has been above this longer-term average in recent years. For instance, an average of more than 600 new dwelling building approvals have been observed in the past three years.
Figure: 5.1: New Dwelling Building Approvals, 2011-12 to 2018/19
700 652 632
600 531
500 448 398 410 368 400 357
Dwellings 409 420 300 292 200 226 227 247 195 100 185
0 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Wonthaggi - Inverloch (SA2) Bass Coast (S)
Source: ABS, Building Approvals, Australia (8731.0)
5.3 Residential Property Sales Trends
Between 1998 and 2001, the Bass Coast property market experienced strong growth in the number of residential property sales, and strong growth in property prices. This was particularly the case in Victoria’s coastal areas. Since this buoyant period in the property market, indicators show a general slow-down in the residential land market in terms of sales and prices.
Figure 5.2 shows the long-term trend in the number of residential property sales in Bass Coast Shire, with comparisons against data for regional Victoria as a whole. In Bass Coast Shire, the number of residential sales peaked in 2001 at approximately 2,810 sales, and has since declined to approximately 1,838 sales in 2018. The graph illustrates that this slow-down in residential sales in Bass Coast reflects the trend throughout regional Victoria.
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Figure 5.3: Total Residential Sales, Bass Coast Shire and Regional Victoria, 1988-2018
3,000 60,000
2,500 50,000
2,000 40,000
1,500 30,000
1,000 20,000 Regional Vic. Dwelling Sales Dwelling Vic. Regional
500 10,000 Bass Coast (S) Dwelling Sales Dwelling (S) Coast Bass
0 0 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Bass Coast (S) Regional Vic
Source: Valuer General, A Guide to Property Values, 2019
Residential sales in coastal towns which are popular holiday home locations, such as Cape Paterson, are generally more reliant on buoyant macro-economic conditions. For instance, holiday homes are often considered a ‘luxury’ item or investment. In times of economic hardship, the holiday home is typically an investment that will be sold.
Growth has occurred in the number of vacant land sales in Cape Paterson in recent years, increasing from an average of 4 sales between 2011 and 2015, to an average of 23 sales between 2016 and 2018. Residential property sales trends are shown in Figure 5.3.
Growth in the number house sales in Cape Paterson has also occurred, indicating demand for residential properties in the town. The total number of residential property sales (including house, unit and land sales) has increased every year from 2011 to 2017, before a slight decline in 2018.
Figure 5.3: Residential Property Sales in Cape Paterson, 2005-2018
100 90 80 24 70 16 60 8 29 9 50 1 3 2 40 8 1 5 0 0 30 5 2
20 0 Number of properties ofNumberproperties sold 10 29 24 37 48 47 51 56 38 0 2011 2012 2013 2014 2015 2016 2017 2018
House Unit Vacant Land
Source: Pricefinder
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5.4 Trends in Property Prices and Land Prices
The amenity associated with a coastal location ensures that Cape Paterson’s residential land and house prices remain above the median prices for regional Victoria. For example, Cape Paterson’s median house price in 2018 of $442,000 is +21% above the regional Victoria median of $365,000.
Similarly, the median vacant residential land price in 2018 for Cape Paterson of $250,000 was +59% above the regional Victoria median of $157,000, as well as being significantly above the median for Bass Coast of $199,000.
Recent price growth between 2014 and 2018 indicates significant gains for houses in Cape Paterson (7.4%) and Bass Coast (7.3%) compared to regional Victoria (5.0%). According to PriceFinder sales data, the median house price in Cape Paterson increased by 15% between 2018 and 2019, reflecting strong demand for residential property.
Table 5.1 shows the median house and land prices for Cape Paterson, Bass Coast and regional Victoria.
Table 5.1: Median Vacant Block and House Prices, 2008-2018 Bass Coast (S) Cape Paterson Regional Vic Year House Vacant Land House Vacant Land House Vacant Land 2008 $275,000 $142,000 $300,000 $228,000 $230,000 $100,000 2009 $290,000 $145,000 $312,000 $220,000 $241,000 $105,000 2010 $332,500 $155,000 $332,500 $240,000 $270,000 $122,500 2011 $350,000 $162,900 $420,000 $232,500 $280,000 $132,000 2012 $330,000 $160,000 $348,000 $210,500 $280,000 $130,000 2013 $334,000 $161,000 $337,000 $215,000 $290,000 $136,000 2014 $340,000 $154,450 $332,000 $238,500 $300,000 $138,500 2015 $340,000 $141,000 $350,000 $224,000 $310,000 $144,000 2016 $350,000 $155,000 $358,000 $220,000 $320,000 $154,000 2017 $395,000 $162,900 $407,500 $280,000 $344,000 $165,000 2018 $450,000 $199,000 $442,000 $250,000 $365,000 $157,000 Annual growth 2008 - 2018 5.0% 3.4% 4.0% 0.9% 4.7% 4.6% Annual growth 2014 - 2018 7.3% 6.5% 7.4% 1.2% 5.0% 3.2% Source: Valuer General, A Guide to Property Values, 2019
5.5 Residential Land Development Trends in Cape Paterson
As indicated earlier, besides land in ‘The Cape’, a very limited supply of vacant residential land currently exists in Cape Paterson. The Cape development is approximately 4.5 years old and, as noted, represents an unconventional product in the local market. In the established residential area in Cape Paterson, supply is considered to be limited. Consequently, the land supply situation is now considered constrained in Cape Paterson.
Analysis of aerial photography (sourced from Google Earth) from various years and a recent site has allowed for the analysis of the development of vacant lots between November 2007 and December 2019 over different periods.
Between November 2007 and March 2010, a development rate of 19 dwellings a year was observed, largely within the Golden Cape Estate. A slowing down of residential development occurred subsequent to this period as the supply of land available for development diminished. For example,
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Cape Paterson
Residential Land Assessment
the extent of residential development post March 2010 slowed to 8 lots per annum between March 2010 and January 2014, and then to 6 lots per annum between January 2014 and May 2016 as a result of a lack of supply and choice in the residential market.
More recently, the development of vacant residential land has increased as lots at The Cape have been released. Since the release of The Cape development increased to 16 lots per annum between May 2016 and July 2018, and 15 between July 2018 and December 2019.
These residential land development trends are shown in Table 5.2.
Table 5.2: Cape Paterson Residential Land Development Trends, 2007-2019
Golden Cape Balance of Established The Total Established Period Estate Township Cape Township Developed Nov 2007 - Mar 2010 39 6 0 45 Mar 2010 - Jan 2014 24 7 0 31 Jan 2014 - May 2016 6 8 2 16 May 2016 - July 2018 7 5 20 32 July 2018 - December 2019 2 7 14 23 Annual Average Nov 2007 - Mar 2010 16.8 2.6 0.0 19.4 Mar 2010 - Jan 2014 6.4 1.9 0.0 8.3 Jan 2014 - May 2016 2.5 3.3 1.0 6.8 May 2016 - July 2018 3.5 2.5 10.0 16.0 July 2018 - December 2019 1.3 4.7 9.3 15.3 Source: Google Earth; Ethos Urban
5.6 Net Dwelling Change, 2011 - 2016
Between the last two ABS census counts in 2011 and 2016, the average net dwelling change in Cape Paterson was 17 dwellings per annum, including an average of 12 occupied dwellings and five unoccupied dwellings.
The ABS Census data shown in Table 5.3 indicates that 30% of the net dwelling change between 2011 and 2016 was in ‘unoccupied’ dwellings, largely comprising ‘holiday’ homes.
Table 5.3: Dwelling Change in Cape Paterson, 2011-2016
Dwelling Type 2011 2016 Total Change Annual Growth Vacant dwellings 622 647 25 5 Occupied dwellings 307 366 59 12 Total dwellings 929 1,013 84 17 Occupancy Rate 33% 36% - - Source: ABS, Census of Population and Housing, 2011, 2016
5.7 Forecast Dwelling Demand
In this assessment, an average dwelling demand of 20 residential lots (low scenario) to 30 residential lots (high scenario) per annum has been adopted.
The low scenario figure of 20 residential lots per annum is based on the recent trends which indicate that approximately 20 dwellings a year were developed between November 2007 and March 2010,
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Cape Paterson
Residential Land Assessment
when land was still available in the Golden Cape Estate. This is also slightly above the 15-16 dwellings a year experienced more recently when land at The Cape was released.
However, assuming the proposed rezoning of the Subject Site is approved, this will contribute to an increase in the choice of residential allotments in Cape Paterson. For instance, prospective new purchases of land will have a choice between the following:
• Lots in ‘The Cape’ Eco Village, that will be developed with a strong focus on environmentally sustainability and to the designated design guidelines
• The limited lots in the established residential area of Cape Paterson
• Conventional residential lots at the Subject Site
• Larger residential lots of 1,000m² or more located on the Subject Site.
This choice in residential lots and associated housing products will open the Cape Paterson residential market to a broader range of prospective buyers and developers. Consequently, it is reasonable to expect that dwelling demand will be stronger than that experienced between 2007 and 2010 when the supply of residential lots was predominantly in the form of conventional housing lots in the Golden Cape Estate, and more recently when The Cape reflected a large proportion of dwellings being developed..
Furthermore, if more residential land is brought onto the local market at the Subject Site, then the likely competition in the marketplace, including pressures for keen price competition, would be likely to attract additional buyers into the market.
In addition, the continuing popularity of coastal living is expected to add further demand pressure to communities like Cape Paterson. This trend is observed in many communities around coastal Victoria and elsewhere, and is especially associated with localities within a couple of hours drive of Melbourne. The continued decline of land available for development at the nearby coastal township of Inverloch also has implications for Cape Paterson, with the potential for demand to ‘shift’ from Inverloch to Cape Paterson in the future when land available for development diminishes in Inverloch.
Therefore, it is assumed for the purpose of this assessment that residential dwelling demand in Cape Paterson could be as high as 30 lots per annum. Potential exists that dwelling demand may exceed 30 dwelling per annum and this would depend on a variety of factors including the quality of the residential subdivision at the Subject Site, the range of lot sizes offered and macro-economic conditions.
Assuming a dwelling demand of 20-30 dwellings per annum in Cape Paterson, demand for between 400 to 600 residential lots is forecast over the next 20 years (i.e. 2019-2039). This demand will be accommodated by existing vacant lots in the established residential area, The Cape and the proposed new residential area to the north of Cape Paterson.
5.8 Conclusion: Implications on Residential Land Supply
As shown in Chapter 4, total residential land supply of 245 lots currently exists in Cape Paterson. Based on an average take-up of 20-30 lots per annum, this equates to between a 8.2 and 12.3-year supply assuming all these lots eventuate to the market, which is unlikely for the reasons outlined in Section 4.1. With the exception of limited opportunities to develop in the established area of town, choice in residential lots is limited to ‘The Cape’.
The rezoning of the Subject Site will add approximately a further 480 residential lots to residential supply in Cape Paterson and this will satisfy the longer-term residential requirements in the town.
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Importantly, the proposed rezoning will add an element of choice to the residential market in Cape Paterson, which is likely to stimulate demand in the future.
The future release of lots at the Subject Site is likely to occur in stages that meet market demand. Typically, in small regional towns, this involves the release of small stages of 30-lots or less at any one time. Therefore, it is unlikely the Bass Coast residential market will be saturated with a significant supply of residential lots in Cape Paterson.
To this extent, the proposed rezoning will add approximately a further 480 lots to the total supply of residential land in Bass Coast. Taking into account the Bass Coast Residential Land Supply Assessment 2017/18 and the latest projections in VIF2019 (refer Section 5.1), there is an estimated supply of residential land in Bass Coast of 13.4 years. Based on the projected demand for residential dwellings in VIF2019 (i.e. 581 dwelling a year between 2016 and 2031), the proposed rezoning will add less than an additional one-year supply of residential land. However, as noted above, this supply will be staged over a long period of time.
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Cape Paterson
Residential Land Assessment
6 Economic Considerations for Proposed Rezoning
In addition to providing for the long-term residential land supply needs for Cape Paterson and contributing land supply in the broader Bass Coast Shire, the following economic considerations will arise from the proposed rezoning of the Subject Site:
1 Improved housing choice: Currently a very limited choice in residential land and housing typologies exists in Cape Paterson. The proposed rezoning will contribute significantly to housing choice, which has the potential to attract households from a variety of backgrounds.
2 Contribute to housing affordability: The introduction of competition to the local residential market will put downward pressure on residential land prices and make it more affordable to live in a coastal setting such as Cape Paterson.
3 Benefits of planning for the long-term: The proposed rezoning will provide certainty regarding the long-term future of Cape Paterson as a residential and holiday location. This certainty will enable the provision of infrastructure (i.e. services) in an efficient manner and has the potential attract new investment into the town based on delivery of a long-term vision for the town.
4 Attract construction related investment and employment: The eventual development of 480 dwellings will attract an estimated $144m in construction related investment (in constant 2019 dollars), assuming an average construction cost of approximately $300,000 per dwelling. This level of investment will support a total of approximately 320 direct Full-time Equivalent (FTE) jobs years, based on an average of $450,000 of construction costs per FTE construction related jobs.
The estimate of one FTE construction job-year per $450,000 in construction investment is based on analysis undertaken by Ethos Urban on a variety of ABS and industry sources.
The creation of local construction employment is considered important in the context of a high proportion of Bass Coast labour force is employed in the construction sector (12.7% in 2016 compared to 8.9% in regional Victoria).
5 Contribution to the local tourism sector: It is likely a significant proportion of future dwellings at the Subject Site will be used as holiday rentals and would therefore contribute to the supply of visitor accommodation in Bass Coast. In addition, should the future development of the land contribute to additional facilities and services in the town centre, this would also contribute positively to the tourism offering Cape Paterson and Bass Coast Shire in general.
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Cape Paterson
Residential Land Assessment
7 Conclusion
The main conclusion derived from the analysis and research presented in this report are as follows:
1 Strategic planning support: Local and State Government policies provide support for the urban expansion of Cape Paterson, in particular the expansion of the township to the north. Cape Paterson Strategic Framework Plan, as depicted in the Bass Coast Planning Scheme (Clause 21.09-7) identifies the Subject Site for future short-term and long-term residential uses.
1 Strong population growth has occurred in Bass Coast Shire: Bass Coast has experienced strong growth in its permanent residential population for a number of years with its coastal towns accommodating a large proportion of this growth. Between 2008 and 2018, Bass Coast Shire’s increased at a rate of 2.4% pa, compared to an average rate of growth of 1.2% pa for regional Victoria.
2 Bass Coast’s coastal towns have accommodated a large share of population growth: Between 2008 and 2018, coastal towns in Bass Coast accounted for 60% of the Shire’s growth in its permanent resident population.
3 Strong population growth forecast in Bass Coast: Both VIF2019 and id Consulting forecast a continuation of strong population in Bass Coast Shire. VIF2019 and id Consulting forecast average population growth in Bass Coast of +1.7% pa over the 2016 to 2031 period.
4 Limited residential land supply exists in Cape Paterson: A total existing and future supply of 245 residential lots are currently located in Cape Paterson, comprising the following:
- 55 lots in the established area of Cape Paterson
- 190 lots in ‘the Cape’ eco village.
5 Limited choice in residential land and housing products: There is currently a limited choice in residential land and housing products in Cape Paterson, with only a limited number of lots (three lots as of December 2019) in the established township being available for sale at present. ‘The Cape’ is the only opportunity for anyone seeking to develop in Cape Paterson. While ‘The Cape’ is considered to be an award-winning development in regard to its environmental credentials, it does not necessarily appeal to a wide proportion of the marketplace.
The proposed rezoning will provide an additional element of choice in the Cape Paterson residential land market.
6 Forecast residential dwelling demand: It is expected that as a minimum, annual demand for residential dwellings will be approximately 20 dwellings a year, based on analysis of recent development trends that take into consideration a period when a limited choice in residential land. However, it is likely that should additional choice be provided to the market, demand for residential dwellings is more likely to be in the order of 30 dwellings year. Therefore, over the next 20 years demand for an additional 400 to 600 dwellings in Cape Paterson is forecast to eventuate (assuming an adequate supply is available to the market).
7 Implication of the rezoning and land supply: The rezoning of the Subject Site will add approximately a further 480 residential lots to the supply and will satisfy the longer-term residential requirements in Cape Paterson. Importantly, the proposed rezoning will add an element of choice to the residential market in Cape Paterson which is likely to stimulate demand in the future.
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Cape Paterson
Residential Land Assessment
8 Economic considerations: In addition to providing for the long-term residential land requirements for Cape Paterson, the proposed rezoning will also contribute to the following:
- Improved housing choice
- Improved housing affordability
- Attraction of construction investment and associated construction-related employment
- Contribute to the local tourism sector.
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