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?
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