15 June 2018

ACT Budget to push first home buyers into purchasing apartments

| Tim Benson
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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?

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Capital Retro12:08 pm 19 Jun 19

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


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.

HiddenDragon6:05 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.

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.

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

Capital Retro10:44 am 16 Jun 18

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

@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.

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.

Capital Retro2:05 pm 16 Jun 18

Also close to heavy rail.

Yeah, but you have to drive everywhere.

A detached house isn’t an entitlement.

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.

My first home was a flat. It was nice.

I’m not sure where people who are against apartments think all the conveniently central land for endless new houses is supposed to be magicked from.

Why is Tim so focussed on stand alone houses, as a first home buyer?

Hi Grail, I’m not opposed to apartments, I’m just interested in the how the Government’s policies are being implemented and the impact it will have on the economy ie people and housing prices etc. Another interesting thought that just popped to mind: I wonder what impact it will have on the birth rate in Canberra? Might people put off partnering up and having kids if they live in an apartment? I don’t know. Might do some research …

Capital Retro3:50 pm 16 Jun 18

Is it a coincidence that the one decision-maker in the government who doesn’t have children is the same one pushing for more home units?

Has the government been involved in social engineering to get more people to move into units and densify areas along major transport routes amd city centres?

Um, yes. And it’s only been the open and stated policy for ten years or so and in every major planning document released during that time.

And not just in Canberra either. In fact buying a stand-alone house in many European cities is practically impossible.

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