30 April 2012

Canberra's housing affordability the worst in the country

| johnboy
Join the conversation
37

The ABC has a story on Anglicare’s latest data showing Canberra, despite multi point government plans announced with much backslapping and fanfare, is the worst place in the country:

Anglicare’s National Rental Affordability Snapshot examined about 50,000 properties for rent across Australia, testing how affordable the private rental market is for households on government payments and the minimum wage.

It defined an affordable rental as one which took up less than 30 per cent of household income.

The report found not one capital city passed the test.

Anglicare ACT manager Jenny Kitchin says only 1 per cent of Canberra rental properties are affordable for families on a minimum wage income.

“Canberra would be one of the worst in the country,” she said.

“We found only about 20 properties in the whole of the Canberra rental market that a family living on a minimum, two people living on a minimum wage, could afford.

“But even in those situations, quite often you’d probably have to share to actually boost up the income to be able to afford to pay the rent.”

And that’s after 12 years of Labor Government?

Join the conversation

37
All Comments
  • All Comments
  • Website Comments
LatestOldest

A_Cog said :

According to average measures, Canberra is very affordable. That is, if you are on an average Canberra wage, buying an average Canberra house. See my first post from May 2012 for all this data from the ABS, the Real Estate Insitute, etc for all the numbers.

But for people on the south side of that average curve, things are tough. Rents here are higher than other cities. As the largest single expense for renting households, I empathise with their plight. Renting in Canberra sucks.

I am preparing to organise my mortgage for my yet to be built house and at the moment, with the interest rates the way they are, I will only be paying marginally more in loan repayments than what I am currently paying in rent. During the housing boom a few years back, I was paying more in rent than what most of my friends who had bought houses only a couple of years earlier were paying for their mortgage. But if you have to pay these kinds of rents, it becomes very hard to save up for a deposit and that is the main obstacle for lots of people.

According to average measures, Canberra is very affordable. That is, if you are on an average Canberra wage, buying an average Canberra house. See my first post from May 2012 for all this data from the ABS, the Real Estate Insitute, etc for all the numbers.

But for people on the south side of that average curve, things are tough. Rents here are higher than other cities. As the largest single expense for renting households, I empathise with their plight. Renting in Canberra sucks.

As far as I’m concerned, just keep building at the outer edges and don’t develop anything in inner suburbs at all. That way the NIMBYs are happy (and so am I).

Bramina said :

For starters nimby means that you get a say over what people do with their own private property. This goes against the whole idea of freedom. ..

Yes, of course, when I say “I’m not a fan of high density living” I _really_ mean I hate the whole idea of freedom. What an insight you’ve brought to the discussion.

This is what I meant about snide remarks. You’re not interested in hearing another point of view. You just want to score points on the Internet. Congratulations. 1 point to you.

nhand42 said :

That’s just rubbish. I am a nimby, because I remember when Northbourne had no traffic lights, when driving from Kaleen to Civic took 10 minutes, and when you could walk around Civic without having this oppressive claustrophobic feeling as buildings loomed over you.

I liked Canberra when it had 200k people and that Country Town vibe. Now it’s just a mini Sydney, parking sucks, traffic sucks, people are ruder, there is more crime, knifings and shootings (!) in our suburbs, and for what value? So we can have 24×7 McDonalds and 150+ shoe shops in Civic?

NIMBY, yes, I’m a NIMBY, can’t we have the old relaxing Canberra back? Or if not, where they hell can I live that isn’t trying so hard to be like Sydney?

There is something wrong with the whole concept of nimby. And when I say wrong, I mean it is really, really wrong.

For starters nimby means that you get a say over what people do with their own private property. This goes against the whole idea of freedom. It’s none of your business if a person wants to develop their own private property – no more than the colour of their car is your business, or what they plant in their garden, or what friends they have over.

Nimby means that you get to prevent development from occurring. I need to make this clear – development is good for society. There is no argument against this. It is beyond any doubt. When nimbies block development, they are harming society.

Being a nimby means you get to do these things because it violates your own arbitrary self interest.

nhand42 said :

Tetranitrate said :

The bottom line is that the nimbys don’t want any development and oppose development because relieving scarcity means they may not get the same rental returns or capital gains. Every other argument relating to the ‘character of the neighborhood’, ‘increased traffic’ and ‘concerns about environmental sustainability’ of the sort sprouted by the green variety are simply intellectually dishonest attempts to roadblock development, not legitimate concerns that can ever be resolved.

That’s just rubbish. I am a nimby, because I remember when Northbourne had no traffic lights, when driving from Kaleen to Civic took 10 minutes, and when you could walk around Civic without having this oppressive claustrophobic feeling as buildings loomed over you.

I liked Canberra when it had 200k people and that Country Town vibe. Now it’s just a mini Sydney, parking sucks, traffic sucks, people are ruder, there is more crime, knifings and shootings (!) in our suburbs, and for what value? So we can have 24×7 McDonalds and 150+ shoe shops in Civic?

NIMBY, yes, I’m a NIMBY, can’t we have the old relaxing Canberra back? Or if not, where they hell can I live that isn’t trying so hard to be like Sydney?

Sorry, that’s not being a NIMBY, that’s just being regressive. In all seriousness, I’d suggest looking at one of the small towns nearby, such as Bungendore, or Yass. What you want to see Canberra return to is long gone, and will never return – and it’s not because we’re trying to turn into a little Sydney. Add another 160,000-odd people to a city, and yeah, things are going to change.

Oh, and the idea that all of this change is just in an effort to get more McDonalds and shops? Please…don’t trivialise the thousands of people who have come here to find work, or refuge, or have simply grown up here and are now starting families of their own.

I’m sorry if you’re pining for the good ‘ol days, but they’ve gone – cities change, there’s no stopping it. So in the absence of any chance that Canberra’s going to turn back into what you’re missing, the only change that can possibly make any difference starts with you.

nhand42 said :

Tetranitrate said :

Yeah because building half million dollar townhouses in the inner north causes knife crime. Yes-sir-ee.

No, but if you tried to be that snide and condescending to somebody’s face, I’d be not the least bit surprised if they got all stabby on you.

Only in your crappy suburb.

Tetranitrate said :

Yeah because building half million dollar townhouses in the inner north causes knife crime. Yes-sir-ee.

No, but if you tried to be that snide and condescending to somebody’s face, I’d be not the least bit surprised if they got all stabby on you.

Tetranitrate6:54 pm 01 May 12

nhand42 said :

Tetranitrate said :

The bottom line is that the nimbys don’t want any development and oppose development because relieving scarcity means they may not get the same rental returns or capital gains. Every other argument relating to the ‘character of the neighborhood’, ‘increased traffic’ and ‘concerns about environmental sustainability’ of the sort sprouted by the green variety are simply intellectually dishonest attempts to roadblock development, not legitimate concerns that can ever be resolved.

That’s just rubbish. I am a nimby, because I remember when Northbourne had no traffic lights, when driving from Kaleen to Civic took 10 minutes, and when you could walk around Civic without having this oppressive claustrophobic feeling as buildings loomed over you.

I liked Canberra when it had 200k people and that Country Town vibe. Now it’s just a mini Sydney, parking sucks, traffic sucks, people are ruder, there is more crime, knifings and shootings (!) in our suburbs, and for what value? So we can have 24×7 McDonalds and 150+ shoe shops in Civic?

NIMBY, yes, I’m a NIMBY, can’t we have the old relaxing Canberra back? Or if not, where they hell can I live that isn’t trying so hard to be like Sydney?

Yeah because building half million dollar townhouses in the inner north causes knife crime. Yes-sir-ee.

arescarti42 said :

If the market for land actually worked as one, and wasn’t completely strangulated by government regulations, I can guarantee you it would have a very large and rapid affect on affordability. Imagine if all that land I previously pointed out was available for development tomorrow by anyone who wanted to do so, so that there was actually competition in the market for land. The price of a block would be very close to the cost of developing it (which is most likely considerably less than $100k) and that lower price for land would be reflected all around the city.

And it’s not just releasing land, it is allowing people to build up.

If the market were allowed to operate as it should, people would replace homes near the local centres with apartments.

These apartments could replace single homes with perhaps as many as 10-20 households. That’s 10-20 blocks of land that don’t need to be built on the fringes of the city.

More importantly it’s 10-20 households who don’t need to drive into the city clogging the roads. It’s 10-20 households who are close to public transport and amenities (the great thing is that public transport and amenities improve with increased density).

And we as a society are far better off doing this.

Tetranitrate said :

The bottom line is that the nimbys don’t want any development and oppose development because relieving scarcity means they may not get the same rental returns or capital gains. Every other argument relating to the ‘character of the neighborhood’, ‘increased traffic’ and ‘concerns about environmental sustainability’ of the sort sprouted by the green variety are simply intellectually dishonest attempts to roadblock development, not legitimate concerns that can ever be resolved.

That’s just rubbish. I am a nimby, because I remember when Northbourne had no traffic lights, when driving from Kaleen to Civic took 10 minutes, and when you could walk around Civic without having this oppressive claustrophobic feeling as buildings loomed over you.

I liked Canberra when it had 200k people and that Country Town vibe. Now it’s just a mini Sydney, parking sucks, traffic sucks, people are ruder, there is more crime, knifings and shootings (!) in our suburbs, and for what value? So we can have 24×7 McDonalds and 150+ shoe shops in Civic?

NIMBY, yes, I’m a NIMBY, can’t we have the old relaxing Canberra back? Or if not, where they hell can I live that isn’t trying so hard to be like Sydney?

Tetranitrate5:19 pm 01 May 12

youami said :

But having said that, in-fill is starting to be commonplace in the innter suburbs and at town centres because unit prices are invariably cheaper than a standalone dwellings. And by just opening up land on the outskirts is not necessarily going to make things cheaper because the distance to travel for work and for basic services will all but cancel out any savings in rental.

Not commonplace enough though, the nimbyist screams come up every time.
eg:
http://the-riotact.com/dickson-residents-declare-victory/64652

Building units that’d probably be flogged off nearly half a million dollars each ‘creates ghettos’ apparently.
The bottom line is that the nimbys don’t want any development and oppose development because relieving scarcity means they may not get the same rental returns or capital gains. Every other argument relating to the ‘character of the neighborhood’, ‘increased traffic’ and ‘concerns about environmental sustainability’ of the sort sprouted by the green variety are simply intellectually dishonest attempts to roadblock development, not legitimate concerns that can ever be resolved.

I mean really, if you have to go through years long development applications and end up being dragged through the courts just to build a bunch of units, it’s no wonder infill is so sparse and development so costly.

…and while it’s not strictly a housing matter, the Giralang shops is a pretty good case in point of how screwed up the system is: after the prior occupants deliberately ran the place into the ground almost a decade ago, the site is still vacant and decaying because interested third parties are able to repeatedly torpedo progress for years on end.
From the astroturfed ‘community concerns’ over truck noise to the technical appeals relating to the plans, the bottom line is simply that nearby retailers dislike the idea of competition, would prefer the Giralang shops to remain blighted (to the detriment of people who live in Giralang), and will use any legal or political tool at their disposal to ensure that nothing is done.

VYBerlinaV8_is_back3:49 pm 01 May 12

Great post arescarti, very well said.

rosscoact said :

So, where are these vast tracts of abundant land? Show us the land that’s ready and available for development, the land that isn’t off the table due to Commonwealth environmental legislation, isn’t over the other side of the river, isn’t national park, isn’t in NSW and isn’t owned by the Commonwealth.

The high prices are due to a lot of different factors including periods of constrained supply but it is errant, misinformed nonsense that there is a lot of land available for development.

You’ve got to be joking. Gungahlin and Molonglo alone have the capacity for another 100k people easily, and are clearly available for development because development is slowly taking place there. And that’s just Gungahlin and Molonglo, to say nothing of Kowen, the entire Symonston/Jerrabomberra area, and if people don’t mind aircraft noise, then the entire Majura Valley.

There is a physical shortage of land in Singapore, there is maybe a physical shortage of land in Sydney, but there sure as hell is no physical shortage of land in Canberra. Any shortage here is constructed by terrible government policy (both Territory and Federal).

rosscoact said :

Notwithstanding previous contributory government policies as was quoted only this week in TCT that supply was starting to meet demand. Therefore opening up this imaginary land would have no effect on affordability at all.

If the market for land actually worked as one, and wasn’t completely strangulated by government regulations, I can guarantee you it would have a very large and rapid affect on affordability. Imagine if all that land I previously pointed out was available for development tomorrow by anyone who wanted to do so, so that there was actually competition in the market for land. The price of a block would be very close to the cost of developing it (which is most likely considerably less than $100k) and that lower price for land would be reflected all around the city.

Tetranitrate said :

Oh rubbish, it’s entirely due to the difficulty of getting redevelopments approved and the artificial scarcity of land. With Canberra rents as they are (and have been for 7+ years) we should be seeing far more development on the margins – capitalizing the $500-650 a week you can get for a new 3 or 4 bedroom house leaves plenty of room for building costs and a reasonable price for land. The fact is that there is scarcity because the ACT government has chosen to create scarcity, not because Canberran’s have high incomes on average. Canberrans have had higher incomes for *decades*, including the first decade of self government.

Effectively, what the ACT government has been doing is to use tokenistic programs and public housing to try and prevent serious social problems arising at the bottom and pretend it’s doing ‘something’ while otherwise allowing for the maximum extraction of surplus from the rest of the landless peasants.

I agree, problem is also that ACT Government has not got a lot to places to get revenue from so it will do its best to keep land prices artificially high.

Latest budget papers have an interesting comparison between ACT and NSW in taxation, you will notice some substantial differences.
http://www.treasury.act.gov.au/budget/budget_2011/html/paper3.htm
(Chapter 3, Table 3.1.4, page 57)

But having said that, in-fill is starting to be commonplace in the innter suburbs and at town centres because unit prices are invariably cheaper than a standalone dwellings. And by just opening up land on the outskirts is not necessarily going to make things cheaper because the distance to travel for work and for basic services will all but cancel out any savings in rental.

Only way to fix this is to let Canberra be a city in its own right without stifling development and stupid planning restrictions. BG’s plan and vision has long gone so that is a moot point if anyone argues it(eg. Parkes Way was never part of his plan), now it’s time to build a dynamic and vibrant city and hopefully more affordable and hence more attractive.

rosscoact said :

So, where are these vast tracts of abundant land? Show us the land that’s ready and available for development, the land that isn’t off the table due to Commonwealth environmental legislation, isn’t over the other side of the river, isn’t national park, isn’t in NSW and isn’t owned by the Commonwealth.

The high prices are due to a lot of different factors including periods of constrained supply but it is errant, misinformed nonsense that there is a lot of land available for development.

Notwithstanding previous contributory government policies as was quoted only this week in TCT that supply was starting to meet demand. Therefore opening up this imaginary land would have no effect on affordability at all.

Firstly the environmental legislation and restrictions are one of the problems already mentioned. It constrains the land available for development and the speed in which it could be developed, perhaps too much. Areas in Gungahlin and Molonglo are behind schedule because of this.

There’s another four to five suburbs to be released in Gungahlin and Molonglo land releases have only just started. The entire Jerrabomberra district could be developed if the government wanted to and Kowen is also developable. West Murrumbidgee would also be possible although unlikely. This is just the close land available within the ACT with plenty more available in areas on the other side of the border.

As you’ve mentioned, supply is just starting to meet demand due to increased land releases (plus a softer market) and affordability should increase because of it. But there are still significant bottlenecks which just happen to result in the government earning significantly larger amounts of money for land than would otherwise be the case.
Why would they want that to change?

The communist part of me says the problem here is that part of the population sees housing as an investment to be milked for every dollar, while another part sees it as being a necessity (as it’s cold living on the street in Canberra).

All the simply answers involve blood and violent class warfare.

So, where are these vast tracts of abundant land? Show us the land that’s ready and available for development, the land that isn’t off the table due to Commonwealth environmental legislation, isn’t over the other side of the river, isn’t national park, isn’t in NSW and isn’t owned by the Commonwealth.

The high prices are due to a lot of different factors including periods of constrained supply but it is errant, misinformed nonsense that there is a lot of land available for development.

Notwithstanding previous contributory government policies as was quoted only this week in TCT that supply was starting to meet demand. Therefore opening up this imaginary land would have no effect on affordability at all.

arescarti42 said :

Spot on, in a piddly little town like Canberra with abundant land, the ability of suburban blocks on the fringe to sell for $300k+ is an absolute marvel of abysmal government policy.

Exactly – the amount of mismanagement that must be behind the idea that tiny, tiny, tiny chunks of old sheep paddock should sell for $300K is staggering.

LSWCHP said :

A friend of mine has been trying to sell a “top of the market” house for about 7-8 months now with no luck, which has left her enormously baffled. She hasn’t realised that the market has dropped and she’s not going to make a big profit on her “investment”. In fact, I reckon she’s going to sell it for less than she paid for it, but she hasn’t come to that realisation yet.

She’s not in a rural area, is she? I know of a family who’ve dropped the price of their place over 100k already, and still nothing’s happening.

Tetranitrate said :

Oh rubbish, it’s entirely due to the difficulty of getting redevelopments approved and the artificial scarcity of land. With Canberra rents as they are (and have been for 7+ years) we should be seeing far more development on the margins – capitalizing the $500-650 a week you can get for a new 3 or 4 bedroom house leaves plenty of room for building costs and a reasonable price for land. The fact is that there is scarcity because the ACT government has chosen to create scarcity, not because Canberran’s have high incomes on average. Canberrans have had higher incomes for *decades*, including the first decade of self government.

Effectively, what the ACT government has been doing is to use tokenistic programs and public housing to try and prevent serious social problems arising at the bottom and pretend it’s doing ‘something’ while otherwise allowing for the maximum extraction of surplus from the rest of the landless peasants.

VYBerlinaV8_is_back said :

It’s a difficult situation that doesn’t have a cheap or easy solution.

Well actually it has many easy and highly effective solutions, it’s just that they’re all politically suicidal.
example: the government won’t massively open up tracts of land for development while upping rates for revenue because it would negatively impact those who’ve already bought in.

Spot on, in a piddly little town like Canberra with abundant land, the ability of suburban blocks on the fringe to sell for $300k+ is an absolute marvel of abysmal government policy.

I call bullshit on this. What they should have said is that they found 20 VACANT properties in the whole of Canberra that were affordable. In fact, this seems more suss the more I think about it.

Did Anglicare’s numbers include Queanbeyan? Sydney, Melbourne etc in their entirety have any number of outlaying areas which are cheaper. Parts of Queanbeyan plays that role to some extent in the Canberra context.
How many public housing dwellings are there in Canberra?
How many CHC and other affordable housing providers in Canberra?
Were the ‘properties’ they found that were affordable suitable for the family or were they one bedroom apartments?

There’s no denying that Canberra’s housing is expensive but this is just lazy and designed to manipulate the situation.

It would be interesting if they actually did some work on this rather than have someone look on allhomes one afternoon, because it’s an important issue. that needs facts.

wildturkeycanoe5:19 am 01 May 12

Lower cost housing starts with cheap land, which there isn’t any of. Then you have cheaper building costs, which there aren’t because all the people involved in building the house are trying to finance their own inflated basic living costs. Then the red tape from the government has to be dealt with and the environmental issues such as green energy ratings which put the price up substantially more. If you were allowed to dump a basic 3 bedroom transportable home on a vacant block and simply plug it in to the grid there would be much less strain on purse of the owner. Yup, I blame the government too!

I don’t see this as a specifically Labor government problem — the ‘after 12 years’ remark seems pretty gratuitous in this context.

Housing affordability is a problem in all Australian cities, and has been building for years. Some earlier posts have pointed to contributing elements, but to my mind, the biggest inflationary factor in housing has been a decade or so of cheap credit and an eager rush into ever increasing indebtedness masquerading as ‘aspiration’. Generous negative gearing provisions have only boosted this sentiment (as did popular media frenzies built on the notion that a quick buck was there to be made: home improvements, auction squads, blocks etc).

And ‘inflation’ is what this issue is about. Seems to me the Anglicare study is a timely reminder that housing is, first and foremost, a basic human need (i.e. shelter). And over the last 15 years the cost of meeting this need in Australia has risen at a pace entirely outstripping increases in wages.

One suggestion from Anglicare in terms of responding constructively is to build incentives into the way negative gearing operates that directly support construction of lower-cost housing, framed as investors ‘giving something back’ for what is essentially a government subsidy. They are also suggesting that large public super funds could play a role (typically these have been share-heavy).

Tetranitrate9:46 pm 30 Apr 12

milkman said :

The ‘fishy’ bit is location premium, which many people put a very high value on.

Which totally explains entirely why little dumps out the back of Dunlop that would have been lucky to cost 150k to build seem to be ‘worth’ $400k or more.

Irony being that the assessed value of the land doesn’t come close to matching up.

VYBerlinaV8_is_back said :

EvanJames said :

Diggety said :

Government is the problem, and it will take a politician with a lot of guts to fix it.

It’s ironic that Abbott might be the saviour of the very poor, and the average incomes in with them, while harming the currently well-off, as it’s the housing at the top of the market that will feel the pain first.

The top of the market has already dropped, in some cases by up to 30%. I can’t see the middle or lower ends falling off too much, though, as there is still a lot of demand out there.

A friend of mine has been trying to sell a “top of the market” house for about 7-8 months now with no luck, which has left her enormously baffled. She hasn’t realised that the market has dropped and she’s not going to make a big profit on her “investment”. In fact, I reckon she’s going to sell it for less than she paid for it, but she hasn’t come to that realisation yet.

Eventually she’s going to have to face the fact that the place isn’t worth what she says it’s worth, it’s worth what someone will pay for it. And in these difficult times, people are not prepared to pay the amounts for upmarket houses that they were 6-7 years ago.

another case of using statistics to make the argument you were going to make anyway – I listened to Jenny this morning and she quoted the 20 places and then went on to say how many were in other places – but didn’t alighn the total population, or any other comparison that would make the statistics meaningful. Just because Canberra has 20 and Sydney has 100 doesn’t mean Canberra is worse off – Sydney has a bigger population and per capita the comparison might look very different.

it is tough though for low income and I wouldn’t want to be one in the current market. Yes it is tough having to share but many of us have been through it as a means to an affordable bed, despite this being not our preferred arrangement. As our universities have expanded, particularly in the overseas student population, a lot of the lower cost accommodation has been taken up, or competition has gotten greater.

Bramina said :

CitizenK said :

Duh – is this telling us something we didn’t already know? On average, (and as a Territory) we are the highest earners in the country. This necessarily means that all our costs go up commensurate with our capacity to pay (and remembering we have the restrictive leasehold system which doesn’t help).

That’s not quite right. Prices are not a sole function of people’s ability to pay. Even if they were there should be segments of the housing market that catered to lower income households.

In fact the housing market is notionally a competitive market. It has so many buyers and sellers that nobody can set a market price. In these situations prices tend to reflect the production cost.

Since prices are inflated, something fishy must be going on.

The ‘fishy’ bit is location premium, which many people put a very high value on.

CitizenK said :

Duh – is this telling us something we didn’t already know? On average, (and as a Territory) we are the highest earners in the country. This necessarily means that all our costs go up commensurate with our capacity to pay (and remembering we have the restrictive leasehold system which doesn’t help).

That’s not quite right. Prices are not a sole function of people’s ability to pay. Even if they were there should be segments of the housing market that catered to lower income households.

In fact the housing market is notionally a competitive market. It has so many buyers and sellers that nobody can set a market price. In these situations prices tend to reflect the production cost.

Since prices are inflated, something fishy must be going on.

VYBerlinaV8_is_back4:54 pm 30 Apr 12

EvanJames said :

Diggety said :

Government is the problem, and it will take a politician with a lot of guts to fix it.

It’s ironic that Abbott might be the saviour of the very poor, and the average incomes in with them, while harming the currently well-off, as it’s the housing at the top of the market that will feel the pain first.

The top of the market has already dropped, in some cases by up to 30%. I can’t see the middle or lower ends falling off too much, though, as there is still a lot of demand out there.

Diggety said :

Government is the problem, and it will take a politician with a lot of guts to fix it.

It’s ironic that Abbott might be the saviour of the very poor, and the average incomes in with them, while harming the currently well-off, as it’s the housing at the top of the market that will feel the pain first.

Agree with Tetranitrate.

Government is the problem, and it will take a politician with a lot of guts to fix it.

Tetranitrate3:42 pm 30 Apr 12

CitizenK said :

Duh – is this telling us something we didn’t already know? On average, (and as a Territory) we are the highest earners in the country. This necessarily means that all our costs go up commensurate with our capacity to pay (and remembering we have the restrictive leasehold system which doesn’t help).

It is obvious then that the poorest sods (of which there are less in Canberra than any other city in the country) are going to struggle.

It’s getting so they can’t even afford Queanbeyan either.

That’s why the nearest el cheapo (and probably el crappo) ‘affordable’ housing is in Goulburn and beyond.
It’s not rocket science, and it’s certainly nothing new.

Oh rubbish, it’s entirely due to the difficulty of getting redevelopments approved and the artificial scarcity of land. With Canberra rents as they are (and have been for 7+ years) we should be seeing far more development on the margins – capitalizing the $500-650 a week you can get for a new 3 or 4 bedroom house leaves plenty of room for building costs and a reasonable price for land. The fact is that there is scarcity because the ACT government has chosen to create scarcity, not because Canberran’s have high incomes on average. Canberrans have had higher incomes for *decades*, including the first decade of self government.

Effectively, what the ACT government has been doing is to use tokenistic programs and public housing to try and prevent serious social problems arising at the bottom and pretend it’s doing ‘something’ while otherwise allowing for the maximum extraction of surplus from the rest of the landless peasants.

VYBerlinaV8_is_back said :

It’s a difficult situation that doesn’t have a cheap or easy solution.

Well actually it has many easy and highly effective solutions, it’s just that they’re all politically suicidal.
example: the government won’t massively open up tracts of land for development while upping rates for revenue because it would negatively impact those who’ve already bought in.

Of course if Abbott does get in and carries out a ’96 style gutting, I’d imagine that the problem will solve itself in a satisfactory manner.

VYBerlinaV8_is_back3:10 pm 30 Apr 12

EvanJames said :

I think this kind of report is important, as people here seem to convince themselves that it’s not so bad really. There’s a story comes out saying housing prices fell 2% over a quarter, and now the median is “only” $550k, yippee, affordability! Which doesn’t really look at the real issue, that many people on normal non-EL1 incomes just cannot afford to buy, or rent.

The biggest disservice that the whole property debate does is trivialise the margins by focussing on medians and averages.

For some people, property is and will remain an impossible dream. For others, it’s not much effort at all. Unfortunately, this usually gets lost in the discussions.

I think this kind of report is important, as people here seem to convince themselves that it’s not so bad really. There’s a story comes out saying housing prices fell 2% over a quarter, and now the median is “only” $550k, yippee, affordability! Which doesn’t really look at the real issue, that many people on normal non-EL1 incomes just cannot afford to buy, or rent.

VYBerlinaV8_is_back1:07 pm 30 Apr 12

The issue is not much housing for the masses, as housing for those on low incomes. There is practically nothing available under about $250/wk, which for people reliant on welfare is a lot of $$.

So the govt has a choice: it can encourage the development of low cost housing, or it can put more people in govt-provided housing (or both).

Unfortunately, the view of ACT govco seems to be to collect as much revenue as possible from land sales (ie high prices) as it can. The new NSW suburb/town of Googong has much better land prices (http://googong.net/sales/lot-size-and-price-ranges) but the trade off is that it’s further out so more travel is required.

It’s a difficult situation that doesn’t have a cheap or easy solution.

Duh – is this telling us something we didn’t already know? On average, (and as a Territory) we are the highest earners in the country. This necessarily means that all our costs go up commensurate with our capacity to pay (and remembering we have the restrictive leasehold system which doesn’t help).

It is obvious then that the poorest sods (of which there are less in Canberra than any other city in the country) are going to struggle.

It’s getting so they can’t even afford Queanbeyan either.

That’s why the nearest el cheapo (and probably el crappo) ‘affordable’ housing is in Goulburn and beyond.
It’s not rocket science, and it’s certainly nothing new.

Daily Digest

Want the best Canberra news delivered daily? Every day we package the most popular Riotact stories and send them straight to your inbox. Sign-up now for trusted local news that will never be behind a paywall.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.