ACT Budget to push first home buyers into purchasing apartments

Tim Benson 15 June 2018 55
Do you think there is some social engineering going on in the ACT housing market?

Do you think there is some social engineering going on in the ACT housing market?

I was madly reading the ACT Budget papers in the Budget lock-up last week, and casually announced amongst 12 media releases was a single dot point:

Land release for 17,000 new homes in the next four years

Wow, I thought, the ACT Government is addressing the issue of the oversupply of apartments and the massive amount of apartments that are due to come to market in the next four years by actually building houses on blocks, 17,000 of them …

Thinking this warranted further investigation, I requested assistance from the many knowledgeable Government officials on hand.

First, I was corrected that the ‘new homes’ referred to were in fact ‘new dwellings’ and included ‘detached’, ‘semi-detached’ and ‘units’. Ok, I thought, what is the breakdown between these?

Before actually looking at the figures, I was told that there weren’t more units than houses approved for land release … after retrieving the figures a different picture was revealed.

Of the land release for 17,000 new homes in the next four years:

  • 62% will be units
  • 31% will be houses (detached)
  • 7% will be semi detached

I also requested the forecast value of the 17,000 dwellings to the ACT Government over the next four years. The officials dug out the figure – a massive gross figure of $2.5 billion with a $1.2 billion positive impact on the Budget.

I suggested to the Government official that the decision to approve and bring online thousands more units than houses over the next four years and the fact that the average price difference between houses and units was about $200,000 in favour of units, was contributing to house prices increasing in value at a more rapid rate than units over the next four years, and pushing first home buyers into buying units.

I suggested that the Government was, in fact, participating in ‘social engineering’ and pulling economic levers to push first-home buyers into buying apartments and ‘increasing density’ in our City and Town Centres.

I was told that they couldn’t possibly comment on that, and that that was a question for the politicians …

I’m not opposed to apartments, or living in an apartment, but I do think that the decision to build and buy apartments is currently being driven by the ACT Government through the sheer number of units being approved and built, compared to houses, and the massive average price difference.

Yes, I know you can purchase $2 million plus units – but you can also purchase a one bedroom unit for under $300,000 – case closed.

Do you think there is some social engineering going on in the ACT housing market?

What's Your Opinion?

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55 Responses to ACT Budget to push first home buyers into purchasing apartments
Capital Retro Capital Retro 12:08 pm 19 Jun 19

This will “push them out the door” and destroy the ACT economy overnight.

madelini madelini 11:48 am 22 Jun 18

Firstly, this has been happening for a long time; I don’t know why the writer seems so surprised. Aside from everything else, though, flats and units are more environmentally friendly than stand alone houses, allow people to live closer to town centres for less money, and provide great housing solutions for young professionals who don’t need or want yards.

Secondly, first home buyers are not restricted in any way. You save on stamp duty (more important now the FHOG has gone out the window, and that was restricted to new builds or substantially renovated properties for many years, and capped at a certain amount anyway_, but if you want a stand alone house in an established suburb, you can always just save and forgo any Government kickbacks. I have many friends who have opted for this route, earning average or median incomes in this city.

Peter Mackay Peter Mackay 11:15 am 18 Jun 18

I wonder what our MLAs live in. Not shoeboxes, is my guess.

    Mark Dando Mark Dando 1:05 pm 18 Jun 18

    From pics she tweets I think Elizabeth Lee lives in an apartment with a beautiful view in the inner south - as do I. Mine is certainly not a shoebox nor a detached box in the suburbs. But I suspect you have as much interest in my opinion of your living arrangements as I do of your opinion of mine.

    Julie Macklin Julie Macklin 12:28 am 19 Jun 18

    Maybe not, but they are not first home buyers. Not a comparison. First home buyers should not expect their first house to be what their parents took years to get. One day they too can aim for a house like their parents have...or better.

    Peter Mackay Peter Mackay 2:44 am 19 Jun 18

    It's not just first home buyers, it's everyone. The building mix has changed radically since self-government.

    Burley-Griffin is being selectively quoted as official policy. When there's something he pushed - like a 1920s tram - the government is promoting WBG's sacred vision. When you look at other aspects of the vision - like the Garden City concept - meh, not so much.

    My concern is that like everything else there's a social gap being increasingly widened. Those with money and power ride in the First Class Suites at the front of the plane, with champagne and caviar on tap, while everyone else gets shoehorned into the ever-more-cramped seats at the back.

    When the representatives of the people live wildly different lives to the people themselves, that's not good for social cohesion.

    Look at Senator Lucy Gichuhi on $200K and complaining she can't afford a housemaid. That's what a base level MLA receives here including car and travel allowances, plus a parking space at or near the Assembly.

    None of these people will be taking the tram they are so keen for others to ride, and with car parking becoming increasingly scarce and expensive in ever-more-crowded Civic, they won't have to worry about finding a slot or feeding a meter.

    Julie Macklin Julie Macklin 11:16 am 19 Jun 18

    Peter Mackay The heading for the article is "ACT Budget to push first home buyers into purchasing apartments"

HiddenDragon HiddenDragon 6:05 pm 17 Jun 18

“I also requested the forecast value of the 17,000 dwellings to the ACT Government over the next four years. The officials dug out the figure – a massive gross figure of $2.5 billion with a $1.2 billion positive impact on the Budget.”

This, surely, is the heart of the matter and it is unlikely that we will see much more than small improvements here and there in ACT Government land and housing policy and performance until and unless those we elect and pay to govern us face up to the longer term fiscal issues confronting the Territory.

If we go on treating land and housing policy essentially as a vehicle for extracting maximum government revenue to pay for all the big election-time promises, for a bureaucracy which, it would seem, can never have enough Commissioners and consultants, and for what often looks like extensive cross-border service delivery without full and proper compensation, then we will just go on getting more of the same – paying more (and more, and more) for less when it comes to housing.

Oliver Harrap Oliver Harrap 1:40 pm 16 Jun 18

Well it sucks to have purchased an apartment in the last ten years - prices haven't gone up they've gone backwards. And with so many being built that looks set to continue. Meanwhile housing keeps doubling. Apartments suit town centres and some main transport routes, maybe around shops for community purposes (eg aged, disability) but not suburbia. We need a mix of property types for different needs but it doesn't seem like the balance is right at the moment. There could be more moderate subdivision of big blocks in inner areas too eg 2 houses one block, and more townhouses.

bj_ACT bj_ACT 12:28 pm 16 Jun 18

Problem with the new apartments being built is that they are mostly 1 bedroom and not suitable for young families.

The Government should encourage more larger units, play areas for kids, rooftop gardens for the adults and compulsory double glazing of all windows.

Tracy Tracy 9:33 am 16 Jun 18

If first home buyers are able to find affordable apartments to purchase, then that doesn’t sound like a bad thing.

    Capital Retro Capital Retro 10:44 am 16 Jun 18

    Over-supply will soon solve that. Some people who are contemplating buying off the plan should wait.

    madelini madelini 11:43 am 22 Jun 18

    @Roger, the Great Wall of Mawson predates any of the current first home concessions. If anything, Mawson was built on townhouses and units so I fail to see how more developments are a bad thing or will have any negative impact on the suburb.

Roger Mungummary Roger Mungummary 8:00 pm 15 Jun 18

Yes and destroying suburbs like Mawson as they do it.

Helen Holloway Helen Holloway 7:49 pm 15 Jun 18

Justify the building of a tram line

Neica Hall Neica Hall 6:36 pm 15 Jun 18

No one in their right mind would buy an apartment in the ACT they have the doggest building standards in the country. The apartment buildings here leak they have rising damp and are just generally built by crooks.

    Obi Wan Obi Wan 2:30 pm 16 Jun 18

    Not to mention how ugly the buildings are

    Liv Stefek Liv Stefek 5:49 am 17 Jun 18

    Obi spot on. How hard is it to build something pleasing to the eye?

Em Ma Em Ma 4:21 pm 15 Jun 18

Not surprised already doing it with stamp duty only being waived for anything under 470K, they have approved so many apartment buildings they have to do it....I’ll be off the Queanbeyan to buy.

Wade Bermingham Wade Bermingham 3:14 pm 15 Jun 18

well they have upped the rates on apartments not surprising they'd push people into buying them

Sharon Daley Sharon Daley 2:41 pm 15 Jun 18

Absolutely - and those of us who buy in established areas who enjoy having a yard etc find themselves unable to prevent triple occupancy happening next door.

A_Cog A_Cog 2:22 pm 15 Jun 18

OMG come live in Oaks Estate. In 2017-18, a large house in Florence St sold for $465K on a 1012m block, a lovely cottage with granny flat on 1012m sold for $490K, and 1-bedder flats in River St routinely go for $180K.

George St is where the social problems are, so if you live in River or Florence Sts, you’re 12mins from Civic with a mortgage you can laugh at.

Lucy Baker Lucy Baker 1:59 pm 15 Jun 18

A detached house isn’t an entitlement.

Obi Wan Obi Wan 1:47 pm 15 Jun 18

They're destroying Canberra 😥😥😥😥

    Red Man Red Man 6:01 am 16 Jun 18

    There is only so much land.....

    Judy King Judy King 2:22 pm 18 Jun 18

    They sure are, it's so sad and we are only a small area. According to Wikipedia it is only 88.5kms from north to south and 57.5kms east to west.

    Plus the traffic issues are already a nightmare.

Jessica Brisbane Jessica Brisbane 12:43 pm 15 Jun 18

They have to to meet the Light Rail business plan.

    Red Man Red Man 6:06 am 16 Jun 18

    They’re providing a service, why not take advantage of that? Should provide more of it and stop building roads and less car parks. Force people onto public transport or walk/ride bikes. Can only be good.

    Tim Benson Tim Benson 7:11 am 16 Jun 18

    I have been thinking lately whether people living ten minutes walk from the City will actually use the light rail ...

    Obi Wan Obi Wan 2:34 pm 16 Jun 18

    Public transport is not worth, to me to go to work from Tuggeranong to Civic is much better to drive, and parking cost me the same thing of a bus fare.

    Red Man Red Man 5:39 pm 16 Jun 18

    Tim Benson Wall-E.

Amanda Evans Amanda Evans 11:59 am 15 Jun 18

We need to consider other impacts such as physical and visual access to both private and public landscapes, parks, trees, grass etc. The mental and physical health of our community is dependant on it.

Perhaps developments should have meaningful public(and private of course)space requirements attached to each development proposal. They could contribute enormously to our public realm.

    Tim Benson Tim Benson 7:09 am 16 Jun 18

    Yes, pets, community flower and vegetable gardens, community chickens ... music practice, rehearsal and performance rooms ...

    Liv Stefek Liv Stefek 5:47 am 17 Jun 18

    Totally agree Amanda. Very hard to have a dog in a unit. I’ve got a ten year old who I won’t part with, so units are out. I would love to be able to find an affordable town house with private courtyard but they’re near impossible or super expensive in the new areas.

    I believe too we all need a bit of outdoor space for mental health

    Liv Stefek Liv Stefek 5:47 am 17 Jun 18

    Tim you sound like you know how to build something very nice! Great ideas.

Steven Lloyd Steven Lloyd 11:47 am 15 Jun 18

Buying a apartment in Canberra is bad investment as there to many and always a newer one been built so why would somone buy a old one when they can get a new one for a better price. I myself would never buy one at the moment to many of my mates have and said they have lost money or the work in the apartment was shitty work and had issue.

Wing Nut Wing Nut 11:43 am 15 Jun 18

There’s nothing wrong with apartment living but there’s a massive gap between what people want and what the market is offering. We, as a family of four, looked at new build apartments in Gunghastly and struggled to find anything that would meet our needs. We did eventually buy a townhouse in Palmerston that was larger and cheaper than any of the three bedroom apartments in the area and still got a 320sq/m block to boot. The governments attempts at social engineering is like many of its other endeavours; poorly considered options delivered through half baked solutions.

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