30 October 2019

Builders back Libs' land-release pledge to re-balance unit dominated market

| Ian Bushnell
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Stand-alone houses

Stand-alone houses remain in the shadow of apartment development. Photo: File.

The building industry has backed the Canberra Liberals’ pledge to boost the supply of land for single houses if they win Government next year, saying people did not have enough of a choice of housing types and the high price of land was a key factor.

Master Builders ACT CEO Michael Hopkins said that while the Canberra market had shifted in recent years to apartments, the decline in single housing should be addressed, as well as the ‘missing middle’ of small-scale units, townhouses and dual-occupancies.

He said the price of land in the ACT was incredibly expensive with supply constrained in recent years and releasing more land was one of the ways to reduce the cost and increase the viability of smaller-scale development.

“One of the issues we need to come to terms with is how we can deliver affordable housing when our land is so expensive,” Mr Hopkins said.

He said there needed to be a greater diversity of housing stock in the market to meet the needs of the ACT’s changing households but a number of factors, including the price of land, were holding back builders.

“These are the types of projects which at the moment are hard to make viable to build because of land prices, lease variation charges and, in particular, development application delays,” he said.

MBA CEO Michael Hopkins

MBA CEO Michael Hopkins says we need to address the ‘missing middle’ of small-scale units, townhouses and dual-occupancies. Photo: Supplied.

Build-ready land was available in the short term but down the track the ACT would need more.

“We know demand is only going to increase because of population increase, and the economic fundamentals that will drive a lot more people to move Canberra for jobs,” Mr Hopkins said.

He would not be drawn on the areas highlighted by Opposition Leader Alistair Coe, such as Kowen in Canberra’s north, but said any new areas would have to be assessed for environmental factors, and the ability to provide infrastructure to make sure they were suitable for development.

“If government was looking to open up new fronts it’s something we’d be willing to work with them on,” he said.

The MBA supported the thrust of the Barr Government’s Housing Choices paper but those policy ideas needed to be translated into action.

“It’s now time for that policy direction to be turned into actual Territory plan variations so we can turn that policy into actual projects on the ground,” Mr Hopkins said.

With dwelling starts at a four and a half-year low, according to latest CommSec State of the States report and fewer loans being written for new housing, the industry is still recovering from the uncertainty created by the banking royal commission and the election.

But affordability remains a core issue with ABS figures showing potential first home-buyers in the ACT are struggling to get a foothold in the market, especially for the more expensive stand-alone product.

Loans to first-home buyers dropped 18.6 per cent over the 12 months to August, owner-occupier loans for new home construction were down 30.5 per cent and the number of owner-occupier loans to purchasers of new homes slumped 47.8 per cent.

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HiddenDragon6:48 pm 01 Nov 19

“….as well as the ‘missing middle’ of small-scale units, townhouses and dual-occupancies….”

The prices being paid for the existing, ageing stock of these sorts of dwellings is clear evidence of the strong, ongoing demand for them, and sensible land release policies would increase the supply.

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