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3,000 new dwellings a year for the next five years.

By 11 May 2009 23

How to make houses cheaper? Have more of them.

To that end Chief Minister Stanhope has announced that he’s going to be releasing 3,000 “dwelling sites” to the market each year for the next five years.

Unless it makes housing too affordable of course, because home owners can vote pretty cohesively:

    “While the intention is to release 3,000 sites a year, the government will continue to closely monitor the market and consult with the private sector, to ensure the market can absorb this level of supply. If market conditions change, the program will be adjusted accordingly.

    “The ACT Government will continue to maintain a proactive level of land release to meet the strong demand for residential housing and achieve the outcomes for our housing affordability strategy,” Mr Stanhope said.

Also to accommodate all the white goods that will be needed to furnish all these new houses more industrial land is going to be released in Hume and Fyshwick.

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23 Responses to
3,000 new dwellings a year for the next five years.
Qbn Gal 4:25 pm
11 May 09
#1

And how much will be available for public housing?

peterh 4:30 pm
11 May 09
#2

the problem isn’t just a lack of houses, it is a lack of blocks cheap enough to include a decent backyard. The new properties being built in gungahlin are massive, the yards are tiny. it seems strange that the houses have grown so much in size to provide a 4 bedroom house on the entirety of the block.

johnboy 4:32 pm
11 May 09
#3

Cheaper and more abundant dwellings will take a great deal of pressure of public housing.

And backyards are completely and utterly irrelevant.

If people prefer four bedrooms to a yard then that’s their look out.

Clown Killer 4:43 pm
11 May 09
#4

And backyards are completely and utterly irrelevant.

I love a backyard, and vted with my families feet to move from inner north to south to get my hands on a nice big one. JBs right though. At the entry level end of the market you’re not going to be buying enough land to have an house and a yard.

As far as the bigger houses go, that’s their choice – so long as people don’t expect the tax payer to stump up for open space just because they have chosen to build all over theirs- it’s fine by me.

Jivrashia 5:12 pm
11 May 09
#5

peterh said :

The new properties being built in gungahlin are massive, the yards are tiny.

Trend of times methink. 30 years ago it would’ve been a tiny 3 bedroom double brick house with modest veranda on the front and back, and massive front, back, and even side yards.

Now days I think you have space to easily swing an adult in most rooms.
(Kids, don’t try this at home.)

peterh 5:13 pm
11 May 09
#6

johnboy said :

Cheaper and more abundant dwellings will take a great deal of pressure of public housing.

And backyards are completely and utterly irrelevant.

If people prefer four bedrooms to a yard then that’s their look out.

jb, true, but there aren’t any more cheaper and abundant dwellings going into the areas that the new developments are in. the building industry snaps up a lot of the land, and builds mcmansions on them. considering the influx of new people to canberra via posting rounds and other transfers, we are growing, but there isn’t a lower level of suburb apart from bonner, and the houses are located in close proximity to each other. In order to create affordable housing, perhaps the creation of family parks like the ones found in the uk like in notting hill are a solution. then you can build as much as you like on the blocks, and the kids still will have a safe place to play.

for example, a search of gungahlin for a house around a maximum of 300K on allhomes yields 8 properties of all types. the blocks in this new proposal will only be successful if the lda allows sale only to individuals, not to builders.

johnboy 5:19 pm
11 May 09
#7

Oddly enough, builders will build what they think people want to buy.

If they get it wrong then the community gets a really cheap house on the market.

bigfeet 5:28 pm
11 May 09
#8

Qbn Gal said :

And how much will be available for public housing?

Why should any of it be? There is far more public housing in Canberra than should ever be needed. It is just not used effectively.

hax 5:52 pm
11 May 09
#9

I hate to break this to people, but the reason houses are so ‘big’ on blocks is because of the price of the land.

You’re not going to get much yard with a 4 bedroom house on a 600sqm block, unless your proposing people spend 250k+ on land and then build a small 3 bedroom house (no ensuite, single garage, etc..) – any investor would say you’ve got to be kidding.

In the “old days” land was cheap and over 1000sqm, so first home buyers could actually build a small house with a huge yard – now they get <250sqm

What’s hilarious is, everyone is pointing the finger at the wrong people, and the problems just keep getting worse.

gomer 5:59 pm
11 May 09
#10

the main problem with your argument jb is that there is no oversupply. so basically it doesn’t matter what a builder builds, it will be sold anyway, even if its not what people want. its either crap or nothing. you should see some of the pieces of garbage I’ve inspected, yet they all had a list of buyers or renters. some of them were potentially lethal with serious cracks in the brickwork. To have an effective market we need a supply level where new houses don’t get sold until the builder tears down their crap new house and builds a good one.
After all, there is no shortage of land in Australia. Australia is so sparsely populated that every Australian could have a nice house on the beach or river front and there would still be plenty to spare. If you drive 1 hour out of Canberra you can buy land for 50cents per square meter which would make the average housing block worth about $500.
Anyway the housing land supply problem is purely an artificial one created by local & state governments. Ask yourself, is your property really worth that much, if you answer is yes then you should have no problem having the govt release another 50,000 blocks next week.

johnboy 6:01 pm
11 May 09
#11

OK Gomer..

So what is the solution to the problem you describe? I believe it would be to increase supply no?

housebound 6:02 pm
11 May 09
#12

3000 a year isn’t really worth an announcement.

From memory, ABS stats show an average sale of about 2500 to 3000 blocks per year, except for 2004-05 when substantially fewer blocks were released (thank you Labor and your LDA).

So the announcement is ‘more of the same’, and unless population growth rates decline, house prices will stay high – good news for investors, bad news for people who actually want somewhere to live.

I’ll try to find the ABS link if anyone is interested.

canberra bureaucrat 7:49 pm
11 May 09
#13

gomer said :

After all, there is no shortage of land in Australia.

Very true, as long as you don’t want town infrastructure! (water, roads, phone, sewerage, etc)

I think JB is right with “Oddly enough, builders will build what they think people want to buy.” Building businesses have an incentive to make profit, and if people wanted 3 br cottages on their 600 sqm block, then people would pay for it and builders would exploit this demand to make money. These houses would be cheaper, and they could (presumably) still make the requisite profit. The building industry appears to be a reasonably competitive market (i.e. businesses cannot influence market price). Correct me if I am wrong. This being the case, builders have no incentive to build things people don’t want, as they would simply lose money.

canberra bureaucrat 9:04 pm
11 May 09
#14

gomer 9:29 pm
11 May 09
#15

canberra bureaucrat said :

gomer said :

After all, there is no shortage of land in Australia.

Very true, as long as you don’t want town infrastructure! (water, roads, phone, sewerage, etc)

CB surely you can’t be saying that Australians have always paid 5 times the average wage for the typical infrastructure for an average home. it’s interesting that you mention utilities that are privately owned for which you pay connection and usage.

at the end of the day we dont have a balanced market or anywhere near it.

JC 2:24 am
12 May 09
#16

With the block size issue it is like a chicken and egg situation. Did the land size shrink because we wanted smaller blocks or because developers shrunk the blocks to make more money? My guess is the latter.

As for house sizes yes they have been getting bigger, but at the same time the land getting smaller. So it is hardly a case of simply building larger houses. If that was the case logic would say the land size would go up.

I for one hate how this city is growing. The block sizes in the new suburbs is a joke, especially for the price we have to pay. The government should go back into development fully and charge just the cost. Ie not make a massive profit like the developers are doing. That is the only way to bring costs down and give good fair sized blocks. To me a good block for a family home is between 700-1000m2.

chrispy 8:04 am
12 May 09
#17

It’s amazing how much unnecessary stuffing around was done in the Franklin (Gungahlin) area before any residents began living there. They (the developer) seemed to run a grader through the whole development which destroys the top-soil and creates a dust storm for the rest of gungahlin. Then they started moving dirt from here to there which I can only assume was to maximise the number of plots which wouldn’t be necessary if the govt released a larger amount of land for development in the first place.

VYBerlinaV8_the_one_ 8:44 am
12 May 09
#18

Ultimately, the release of land has to be a good thing for Canberra. The idea, I think, would be to release just a fraction more than demand dictates, to allow for a better price spread on the available stock.

As for house sizes, people tend to build the best they can afford. Unfortunately you don’t see many instances of people building small to moderate sized houses that are well suited to future extensions.

The issue now will be making sure we have enough builders, and that their work is of an acceptable standard.

Gungahlin Al 9:52 am
12 May 09
#19

So many themes I want to chime in on in this thread…

Attended a workshop at ACTPLA last week about a new policy being developed for “medium sized blocks”, which were classed as 250-500 sq m! To be fair, the planners took on board my objection to the premise. GCC’s community surveys have shown that the community is over this myth that “the market” is demanding smaller blocks. Let’s be clear about one thing: we’re not running out of land – ACT is. There is only so much empty land between us and the NSW border, and no MLA has a clue how they could possibly balance a budget once there’s no more left to sell. But good planning would have us looking at the land immediately north of Gungahlin, providing reasonable size blocks, and a high-speed arterial PT network.

On yards: JB is kind of right – it is a decision people make to a certain degree. We chose a block that is 569m (corner block so probably equal to a 500-520 block building wise). And we chose to put a 3-bedroom 1-dining house on it, as a yard was a high priority for us for our kids to grow some fruit and veg, a good size clothes line to reduce energy use, a big-ish tank, and a bit of lawn (about 30m). We could have stuck another bedroom upstairs if needed without compromising the yard though but we wanted an accessible home (and didn’t have the $$).

On big houses: the building trade here has people scared of going up. They tell you a room that would cost $20K on the ground will cost $45K up a level. So people sacrifice yard. But 2-storey is standard fare for townhouses, so how much truth is in that assertion?

Stuffing around: Crispy you are spot on! I can’t believe how much land manipulation goes into land development here. Has every little bump got to be smoothed out and shaped just so?? In Qld developers build the roads, some stormwater management, and that’s that. People put houses on the ground, on posts, or bloody great poles, depending on the *natural* lay of the land. (And as a Councillor I have seen far more developments than most people would see in a lifetime.) As a result you wouldn’t have a clue what natural ground is here. And the extra costs that loads onto the buyer are extraordinary – built into the price and in piers due to unstable fill (as if the bloody clay wasn’t bad enough).

On the announcement: isn’t it just a re-release of what has already been put out several times? Housebound is right. The blunt reality is that people continue to queue and to pay whatever is asked because demand still far outstrips supply – worsened by the skewing of the 1st home owners grant favouring new builds over resale. I plain do not believe that the ACT Govt will move towards a situation of supply exceeding demand, no matter how many times they tell us it is so. They are handcuffed to the budget bottom line of their valuation/price fixing situation. BTW I’m hearing that the skew of the grant to new builds is because the Feds get all of it and then some back in GST and other revenues, which they don’t for a resale.

Enough…

hax 11:59 am
12 May 09
#20

Gungahlin Al said :

On big houses: the building trade here has people scared of going up. They tell you a room that would cost $20K on the ground will cost $45K up a level. So people sacrifice yard. But 2-storey is standard fare for townhouses, so how much truth is in that assertion?

The extra cost makes sense.
Structural reinforcement, materials, additional equipment/safety, higher insurance, etc
Also just placing one or two rooms above is more costly (per sqm) than an exclusively two story building.

lol.. people either complain about it being a rip-off, or poorly built/cookie-cut etc — There is no such thing as cheap and magnificent!! (this isn’t obvious?)

I don’t think people understand what the ‘normal’ cost should be, and ‘the market’ isn’t willing (or able) to pay for ‘quality’ any more.. (*cough* land price *cough*)

Gungahlin Al 12:07 pm
12 May 09
#21

Fair ’nuff

GregW 12:30 pm
12 May 09
#22

My understanding is that most of the additional costs of building a double storey is offset by the reduced roofing, ground work, slab etc.. that is required. And that in markets with high land value it actually becomes cheaper when the land value component is included. Granted, to a builder this component is irrelevent but $20K vs $45K still seems absurd.

hax 8:57 pm
12 May 09
#23

GregW said :

My understanding is that most of the additional costs of building a double storey is offset by the reduced roofing, ground work, slab etc.. that is required. And that in markets with high land value it actually becomes cheaper when the land value component is included. Granted, to a builder this component is irrelevent but $20K vs $45K still seems absurd.

Briefly.. what you’re saying is pretty much correct, except it comes down to scale.
A single room on top is the most expensive (per sqm), and the cost reduces (per sqm) the larger you make it. (it’s mainly the initial cost-hit).

Also, on most blocks of land a 2nd level must be further away from the boundary. There’s really so much more to it, but meh.

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