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Balloting Bonner Blocks

By johnboy 27 April 2010 18

The Chief Minister is proudly announcing that another 349 residential blocks in Bonner have been put up for ballot in the lottery that is the housing market after all the long years he has been in power.

“The Land Development Agency will be releasing blocks in stages 2B, 3A and 3B by ballot, and registrations are open from Tuesday 27 April until Saturday 8 May 2010,” said Mr Stanhope.

“The 349 blocks range in size from 330m2 to 940m2, creating opportunities for everyone from first home owners through to those looking to build a larger family home.”

Better something than nothing one supposes.

What’s Your opinion?


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Balloting Bonner Blocks
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steveu 3:25 pm 30 Apr 10

Hi Aurelius, from what I can see the borders of the ACT are not infinte, there is a huge amount of space in the ACT that is a reserved in some way and cannot be developed (reseans for which would take a rather lengthy discussion), and will remain that way. Hence my statement that there is a finite amount of land available for the local council to exploit. Cheers

Gungahlin Al 12:56 pm 30 Apr 10

random said :

urchin said :

Let’s face it, these developers buy up all the land, stick butt ugly houses on them and drip feed them to the market.

Developers do not have a monopoly on ugly.

No they do not. Check this one out:

http://www.allhomes.com.au/ah/act/sale-residential/1-whim-street-harrison-canberra-kitchen/14139223518511?lid=167483780&prid=1392235185

random 12:32 pm 30 Apr 10

urchin said :

Let’s face it, these developers buy up all the land, stick butt ugly houses on them and drip feed them to the market.

I expect that the uniform houses in the new Village Building Co. development in Watson will look a whole lot better than most suburbs do. It seems that wherever blocks are sold individually, the new owners try to outdo each other for most hideous McMansion: one has a towering Grecian portico, the next has an inexplicable alpine roof, the next is a blocky monument to fallout-shelter brutalism.

Developers do not have a monopoly on ugly.

Holden Caulfield 9:53 am 28 Apr 10

Pandy said :

When I Were a lad, I walked off the street, looked at a map at blocks that had been sold and said: “I’ll take that one” that was under 20 grand. Ay, and you try telling that to the young people of today.

Yep, we did that for our first home in Nicholls back in 1999. We even had the block secured with $0 deposit for a couple of weeks to boot. Once our $1000 holding deposit was paid we didn’t settle for a further 4-5 months until the day before building actually commenced. Them were the days!

Our block was $73K.

Things sure have changed a bit, haha.

Aurelius 8:40 am 28 Apr 10

Steveu,
Whilst I’d love your argument to be a valid one, I look around and I do not see finite land available. I see huge tracts of land the government are failing to develop.
As Gungahlin Al pointed out – until the government releases land in various locations – thus giving purchasers some kind of real choice as to where to build – and releases enough to sate demand, we’re in the situation we’re in.

Pandy 12:09 am 28 Apr 10

When I Were a lad, I walked off the street, looked at a map at blocks that had been sold and said: “I’ll take that one” that was under 20 grand. Ay, and you try telling that to the young people of today.

steveu 9:21 pm 27 Apr 10

The local council has been doing this for year because they have finite land available, and at the end of the day, when they no longer have the ability to sell off land, they will be in a very dire financial position. By keeping supply low, they force demand, and hence prices rise which yeilds them the opportunity to charge higher rates/land tax. The developers have done very well in the past out of this arrangement too. Also, changing planning laws to allow MDU’s near shopping centres has given them breathing space revenuewise as well, in the rates they get from each unit etc.
I believe at the end of the day they are very well aware that their ability to keep themselves afloat fiscally is not sustainable in the long term for this reason, hence drip feeding the property market.

Thumper 7:01 pm 27 Apr 10

But then again, like Aurelius, what would I know, I did cultural heritage, history and teaching at uni. Economics is the dark arts to me 🙂

Thumper 7:00 pm 27 Apr 10

Government gets more money and better PR by (a) constraining supply; (b) appearing to increase supply by releasing in small chunks; and (c) getting great PR from people queuing and from those lucky enough to score a block for some outrageous price.

Pretty cynical exercise in pretending to actually do something, hey HB?

urchin 6:10 pm 27 Apr 10

If the ACT was truly dedicated to providing fair access to new land they would restrict the ballots so that they can’t be exploited as easily.

The following conditions would help significantly:

1. Developers cannot participate in ballots. If there is any land left over *then* they can bid. Let’s face it, these developers buy up all the land, stick butt ugly houses on them and drip feed them to the market. Land banking anyone? If they are truly good builders, customers will come to them with their own land. If they are crap… Well they deserve to go under, don’t they? As it is the only reason many of them exist is because they are sharing in the land monopoly.

2. If anyone decides that they cannot/will not build on the land and/or want to sell it, they can only sell it for the original purchase price or sell it back to the ACT. A number of instances of people buying the land and then putting it on the market again for a premium.

The land itself is damned expensive as it is, we don’t need developers and speculators pushing it up even further.

housebound 5:47 pm 27 Apr 10

Aurelius said :

Anyone else know the economic benefit of a ballot?

Government gets more money and better PR by (a) constraining supply; (b) appearing to increase supply by releasing in small chunks; and (c) getting great PR from people queuing and from those lucky enough to score a block for some outrageous price.

But I guess that would be stretching the term ‘economic’ to include the political benefit to government.

Gungahlin Al 5:23 pm 27 Apr 10

Oh and a key aspect of these ballots is at the very last line of the LDA’s post:

“When can I start building?
You can commence building after the LDA has completed construction on the site and you have settled. Contract Date Ranges for Bonner Stages 2 and 3 will be accessible through this website once they become available.”

Which is likely to be a good year away…another good way the government has discovered to take upset people away from media gaze.

Gungahlin Al 5:20 pm 27 Apr 10

A ballot means the price is set and everyone regardless of means gets the same price. The opportunity for them to be trumped by someone offering a higher (too good to refuse) price (as is known to happen with rentals by some unscrupulous agents) is negated.

It means that the government does not get as much as it possibly could from over the coutner sales, but it is fairer.

However, the government got a very bad look in the media a couple of years ago when some 500 very angry people left a Franklin ballot empty handed, due to the drip-feed of supply from the LDA.

To avoid such bad media coverage, they started doing “pre-ballots” where only the number of people to match the available blocks, plus 50 or so, were drawn from a hat and invited to the ballot itself. There are still hundreds of people who miss out – but with a wave of the PR hand they are never congregated in one spot again for ugly front page photos in the Times.

Meanwhile, the prices continue to be driven up by the inadequate supply side of the equation. They get an independent valuer to advise them on the prices they should set for each release. The valuer of course says “there’s substantial unmet demand, which has pushed the prices up by 10% since the last release, so this lot of blocks should be set at x + 10%.” But who caused the unmet demand???

Until such time as supply exceeds supply, and there is land in multiple releases, in multiple districts, this price manipulation will continue.

Great for any of us who already own, but molto bad for anyone trying to buy for the first time.

Aurelius 4:58 pm 27 Apr 10

Wraith, unfortunately, a boycott – which is the only suitable response – would never happen.

Sloppery, how is a ballot better for the seller?
Letting the law of supply and demand dictate the prices would ensure better prices, wouldn’t it?
Result: land prices would climb.
Solution to this problem: release more land.
Result: seller AND buyers win. Both sides get what they want.

But hey, I did politics and history at uni, not economics. So I might have this all wrong.
Anyone else know the economic benefit of a ballot?

Wraith 3:13 pm 27 Apr 10

Agreed, the whole process is completely flawed, whilst understanding the allure of a new house for some, perhaps the time has come for people to actually take matters in to hand, and just not accept this sort of rubbish any longer, I mean, simply don’t register, then Gov.co and their partners, the developers, might actually be forced in to a negative position and then some consumers (the voters) can get a better deal.

I write it and realise it will never happen……….

sloppery 2:41 pm 27 Apr 10

Bugger – I got the apostrophe wrong! D’oh!

sloppery 2:38 pm 27 Apr 10

Aurelius said :

Ballots are dumb.
They distort the pricing, by skewing the supply-demand.
They’re stunts used by the government for its own purposes.
Appalling piece of policy. Absolutely appalling.

Nasty for people trying to buy a block of land. It is, however, a very good way of making sure the ACT as a whole gets the best return from selling off it’s land assets.

I don’t personally agree with this type of land release, but can understand both sides, I guess.

Aurelius 2:23 pm 27 Apr 10

Ballots are dumb.
They distort the pricing, by skewing the supply-demand.
They’re stunts used by the government for its own purposes.
Appalling piece of policy. Absolutely appalling.

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