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Canberra’s housing affordability the worst in the country

By johnboy - 30 April 2012 37

The ABC has a story on Anglicare’s latest data showing Canberra, despite multi point government plans announced with much backslapping and fanfare, is the worst place in the country:

Anglicare’s National Rental Affordability Snapshot examined about 50,000 properties for rent across Australia, testing how affordable the private rental market is for households on government payments and the minimum wage.

It defined an affordable rental as one which took up less than 30 per cent of household income.

The report found not one capital city passed the test.

Anglicare ACT manager Jenny Kitchin says only 1 per cent of Canberra rental properties are affordable for families on a minimum wage income.

“Canberra would be one of the worst in the country,” she said.

“We found only about 20 properties in the whole of the Canberra rental market that a family living on a minimum, two people living on a minimum wage, could afford.

“But even in those situations, quite often you’d probably have to share to actually boost up the income to be able to afford to pay the rent.”

And that’s after 12 years of Labor Government?

What’s Your opinion?


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37 Responses to
Canberra’s housing affordability the worst in the country
16
rosscoact 6:58 am
01 May 12
#

I call bullshit on this. What they should have said is that they found 20 VACANT properties in the whole of Canberra that were affordable. In fact, this seems more suss the more I think about it.

Did Anglicare’s numbers include Queanbeyan? Sydney, Melbourne etc in their entirety have any number of outlaying areas which are cheaper. Parts of Queanbeyan plays that role to some extent in the Canberra context.
How many public housing dwellings are there in Canberra?
How many CHC and other affordable housing providers in Canberra?
Were the ‘properties’ they found that were affordable suitable for the family or were they one bedroom apartments?

There’s no denying that Canberra’s housing is expensive but this is just lazy and designed to manipulate the situation.

It would be interesting if they actually did some work on this rather than have someone look on allhomes one afternoon, because it’s an important issue. that needs facts.

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17
arescarti42 10:31 am
01 May 12
#

Tetranitrate said :

Oh rubbish, it’s entirely due to the difficulty of getting redevelopments approved and the artificial scarcity of land. With Canberra rents as they are (and have been for 7+ years) we should be seeing far more development on the margins – capitalizing the $500-650 a week you can get for a new 3 or 4 bedroom house leaves plenty of room for building costs and a reasonable price for land. The fact is that there is scarcity because the ACT government has chosen to create scarcity, not because Canberran’s have high incomes on average. Canberrans have had higher incomes for *decades*, including the first decade of self government.

Effectively, what the ACT government has been doing is to use tokenistic programs and public housing to try and prevent serious social problems arising at the bottom and pretend it’s doing ‘something’ while otherwise allowing for the maximum extraction of surplus from the rest of the landless peasants.

VYBerlinaV8_is_back said :

It’s a difficult situation that doesn’t have a cheap or easy solution.

Well actually it has many easy and highly effective solutions, it’s just that they’re all politically suicidal.
example: the government won’t massively open up tracts of land for development while upping rates for revenue because it would negatively impact those who’ve already bought in.

Spot on, in a piddly little town like Canberra with abundant land, the ability of suburban blocks on the fringe to sell for $300k+ is an absolute marvel of abysmal government policy.

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18
EvanJames 10:34 am
01 May 12
#

LSWCHP said :

A friend of mine has been trying to sell a “top of the market” house for about 7-8 months now with no luck, which has left her enormously baffled. She hasn’t realised that the market has dropped and she’s not going to make a big profit on her “investment”. In fact, I reckon she’s going to sell it for less than she paid for it, but she hasn’t come to that realisation yet.

She’s not in a rural area, is she? I know of a family who’ve dropped the price of their place over 100k already, and still nothing’s happening.

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19
HenryBG 11:15 am
01 May 12
#

arescarti42 said :

Spot on, in a piddly little town like Canberra with abundant land, the ability of suburban blocks on the fringe to sell for $300k+ is an absolute marvel of abysmal government policy.

Exactly – the amount of mismanagement that must be behind the idea that tiny, tiny, tiny chunks of old sheep paddock should sell for $300K is staggering.

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20
rosscoact 12:11 pm
01 May 12
#

So, where are these vast tracts of abundant land? Show us the land that’s ready and available for development, the land that isn’t off the table due to Commonwealth environmental legislation, isn’t over the other side of the river, isn’t national park, isn’t in NSW and isn’t owned by the Commonwealth.

The high prices are due to a lot of different factors including periods of constrained supply but it is errant, misinformed nonsense that there is a lot of land available for development.

Notwithstanding previous contributory government policies as was quoted only this week in TCT that supply was starting to meet demand. Therefore opening up this imaginary land would have no effect on affordability at all.

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21
p1 12:34 pm
01 May 12
#

The communist part of me says the problem here is that part of the population sees housing as an investment to be milked for every dollar, while another part sees it as being a necessity (as it’s cold living on the street in Canberra).

All the simply answers involve blood and violent class warfare.

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22
chewy14 1:08 pm
01 May 12
#

rosscoact said :

So, where are these vast tracts of abundant land? Show us the land that’s ready and available for development, the land that isn’t off the table due to Commonwealth environmental legislation, isn’t over the other side of the river, isn’t national park, isn’t in NSW and isn’t owned by the Commonwealth.

The high prices are due to a lot of different factors including periods of constrained supply but it is errant, misinformed nonsense that there is a lot of land available for development.

Notwithstanding previous contributory government policies as was quoted only this week in TCT that supply was starting to meet demand. Therefore opening up this imaginary land would have no effect on affordability at all.

Firstly the environmental legislation and restrictions are one of the problems already mentioned. It constrains the land available for development and the speed in which it could be developed, perhaps too much. Areas in Gungahlin and Molonglo are behind schedule because of this.

There’s another four to five suburbs to be released in Gungahlin and Molonglo land releases have only just started. The entire Jerrabomberra district could be developed if the government wanted to and Kowen is also developable. West Murrumbidgee would also be possible although unlikely. This is just the close land available within the ACT with plenty more available in areas on the other side of the border.

As you’ve mentioned, supply is just starting to meet demand due to increased land releases (plus a softer market) and affordability should increase because of it. But there are still significant bottlenecks which just happen to result in the government earning significantly larger amounts of money for land than would otherwise be the case.
Why would they want that to change?

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23
youami 1:52 pm
01 May 12
#

Tetranitrate said :

Oh rubbish, it’s entirely due to the difficulty of getting redevelopments approved and the artificial scarcity of land. With Canberra rents as they are (and have been for 7+ years) we should be seeing far more development on the margins – capitalizing the $500-650 a week you can get for a new 3 or 4 bedroom house leaves plenty of room for building costs and a reasonable price for land. The fact is that there is scarcity because the ACT government has chosen to create scarcity, not because Canberran’s have high incomes on average. Canberrans have had higher incomes for *decades*, including the first decade of self government.

Effectively, what the ACT government has been doing is to use tokenistic programs and public housing to try and prevent serious social problems arising at the bottom and pretend it’s doing ‘something’ while otherwise allowing for the maximum extraction of surplus from the rest of the landless peasants.

I agree, problem is also that ACT Government has not got a lot to places to get revenue from so it will do its best to keep land prices artificially high.

Latest budget papers have an interesting comparison between ACT and NSW in taxation, you will notice some substantial differences.
http://www.treasury.act.gov.au/budget/budget_2011/html/paper3.htm
(Chapter 3, Table 3.1.4, page 57)

But having said that, in-fill is starting to be commonplace in the innter suburbs and at town centres because unit prices are invariably cheaper than a standalone dwellings. And by just opening up land on the outskirts is not necessarily going to make things cheaper because the distance to travel for work and for basic services will all but cancel out any savings in rental.

Only way to fix this is to let Canberra be a city in its own right without stifling development and stupid planning restrictions. BG’s plan and vision has long gone so that is a moot point if anyone argues it(eg. Parkes Way was never part of his plan), now it’s time to build a dynamic and vibrant city and hopefully more affordable and hence more attractive.

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24
arescarti42 2:26 pm
01 May 12
#

rosscoact said :

So, where are these vast tracts of abundant land? Show us the land that’s ready and available for development, the land that isn’t off the table due to Commonwealth environmental legislation, isn’t over the other side of the river, isn’t national park, isn’t in NSW and isn’t owned by the Commonwealth.

The high prices are due to a lot of different factors including periods of constrained supply but it is errant, misinformed nonsense that there is a lot of land available for development.

You’ve got to be joking. Gungahlin and Molonglo alone have the capacity for another 100k people easily, and are clearly available for development because development is slowly taking place there. And that’s just Gungahlin and Molonglo, to say nothing of Kowen, the entire Symonston/Jerrabomberra area, and if people don’t mind aircraft noise, then the entire Majura Valley.

There is a physical shortage of land in Singapore, there is maybe a physical shortage of land in Sydney, but there sure as hell is no physical shortage of land in Canberra. Any shortage here is constructed by terrible government policy (both Territory and Federal).

rosscoact said :

Notwithstanding previous contributory government policies as was quoted only this week in TCT that supply was starting to meet demand. Therefore opening up this imaginary land would have no effect on affordability at all.

If the market for land actually worked as one, and wasn’t completely strangulated by government regulations, I can guarantee you it would have a very large and rapid affect on affordability. Imagine if all that land I previously pointed out was available for development tomorrow by anyone who wanted to do so, so that there was actually competition in the market for land. The price of a block would be very close to the cost of developing it (which is most likely considerably less than $100k) and that lower price for land would be reflected all around the city.

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25
VYBerlinaV8_is_back 3:49 pm
01 May 12
#

Great post arescarti, very well said.

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26
Tetranitrate 5:19 pm
01 May 12
#

youami said :

But having said that, in-fill is starting to be commonplace in the innter suburbs and at town centres because unit prices are invariably cheaper than a standalone dwellings. And by just opening up land on the outskirts is not necessarily going to make things cheaper because the distance to travel for work and for basic services will all but cancel out any savings in rental.

Not commonplace enough though, the nimbyist screams come up every time.
eg:
http://the-riotact.com/dickson-residents-declare-victory/64652

Building units that’d probably be flogged off nearly half a million dollars each ‘creates ghettos’ apparently.
The bottom line is that the nimbys don’t want any development and oppose development because relieving scarcity means they may not get the same rental returns or capital gains. Every other argument relating to the ‘character of the neighborhood’, ‘increased traffic’ and ‘concerns about environmental sustainability’ of the sort sprouted by the green variety are simply intellectually dishonest attempts to roadblock development, not legitimate concerns that can ever be resolved.

I mean really, if you have to go through years long development applications and end up being dragged through the courts just to build a bunch of units, it’s no wonder infill is so sparse and development so costly.

…and while it’s not strictly a housing matter, the Giralang shops is a pretty good case in point of how screwed up the system is: after the prior occupants deliberately ran the place into the ground almost a decade ago, the site is still vacant and decaying because interested third parties are able to repeatedly torpedo progress for years on end.
From the astroturfed ‘community concerns’ over truck noise to the technical appeals relating to the plans, the bottom line is simply that nearby retailers dislike the idea of competition, would prefer the Giralang shops to remain blighted (to the detriment of people who live in Giralang), and will use any legal or political tool at their disposal to ensure that nothing is done.

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27
nhand42 6:37 pm
01 May 12
#

Tetranitrate said :

The bottom line is that the nimbys don’t want any development and oppose development because relieving scarcity means they may not get the same rental returns or capital gains. Every other argument relating to the ‘character of the neighborhood’, ‘increased traffic’ and ‘concerns about environmental sustainability’ of the sort sprouted by the green variety are simply intellectually dishonest attempts to roadblock development, not legitimate concerns that can ever be resolved.

That’s just rubbish. I am a nimby, because I remember when Northbourne had no traffic lights, when driving from Kaleen to Civic took 10 minutes, and when you could walk around Civic without having this oppressive claustrophobic feeling as buildings loomed over you.

I liked Canberra when it had 200k people and that Country Town vibe. Now it’s just a mini Sydney, parking sucks, traffic sucks, people are ruder, there is more crime, knifings and shootings (!) in our suburbs, and for what value? So we can have 24×7 McDonalds and 150+ shoe shops in Civic?

NIMBY, yes, I’m a NIMBY, can’t we have the old relaxing Canberra back? Or if not, where they hell can I live that isn’t trying so hard to be like Sydney?

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28
Bramina 6:45 pm
01 May 12
#

arescarti42 said :

If the market for land actually worked as one, and wasn’t completely strangulated by government regulations, I can guarantee you it would have a very large and rapid affect on affordability. Imagine if all that land I previously pointed out was available for development tomorrow by anyone who wanted to do so, so that there was actually competition in the market for land. The price of a block would be very close to the cost of developing it (which is most likely considerably less than $100k) and that lower price for land would be reflected all around the city.

And it’s not just releasing land, it is allowing people to build up.

If the market were allowed to operate as it should, people would replace homes near the local centres with apartments.

These apartments could replace single homes with perhaps as many as 10-20 households. That’s 10-20 blocks of land that don’t need to be built on the fringes of the city.

More importantly it’s 10-20 households who don’t need to drive into the city clogging the roads. It’s 10-20 households who are close to public transport and amenities (the great thing is that public transport and amenities improve with increased density).

And we as a society are far better off doing this.

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29
Tetranitrate 6:54 pm
01 May 12
#

nhand42 said :

Tetranitrate said :

The bottom line is that the nimbys don’t want any development and oppose development because relieving scarcity means they may not get the same rental returns or capital gains. Every other argument relating to the ‘character of the neighborhood’, ‘increased traffic’ and ‘concerns about environmental sustainability’ of the sort sprouted by the green variety are simply intellectually dishonest attempts to roadblock development, not legitimate concerns that can ever be resolved.

That’s just rubbish. I am a nimby, because I remember when Northbourne had no traffic lights, when driving from Kaleen to Civic took 10 minutes, and when you could walk around Civic without having this oppressive claustrophobic feeling as buildings loomed over you.

I liked Canberra when it had 200k people and that Country Town vibe. Now it’s just a mini Sydney, parking sucks, traffic sucks, people are ruder, there is more crime, knifings and shootings (!) in our suburbs, and for what value? So we can have 24×7 McDonalds and 150+ shoe shops in Civic?

NIMBY, yes, I’m a NIMBY, can’t we have the old relaxing Canberra back? Or if not, where they hell can I live that isn’t trying so hard to be like Sydney?

Yeah because building half million dollar townhouses in the inner north causes knife crime. Yes-sir-ee.

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30
nhand42 7:07 pm
01 May 12
#

Tetranitrate said :

Yeah because building half million dollar townhouses in the inner north causes knife crime. Yes-sir-ee.

No, but if you tried to be that snide and condescending to somebody’s face, I’d be not the least bit surprised if they got all stabby on you.

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