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More houses for the ACT … rinse and repeat.

S4anta 29 April 2008 11

Much akin to a broken record, or a fat bloke stuck on a merry go round, the Yahoo! Channel Seven conglomerate has a puff piece that even make Anna Coren blush about the ACT Gubmint is set to accelerate the amount of home and commerical land blocks for sale each year. Why is it that each time there is hiccup in the economy, the answer is selling land packages? would the answer be Stamp Duty, job for the tradies? perish the thought.

Under the ‘new’ plan released today up to 4000 new home sites will be released each year. Awesome, one thinks it is in response to the pasting that was delivered by Westpac guru Bill Evans, who believes that Canberra’s economy (or lack thereof) is up the pooper when the economy starts to slow down.

“I don’t think the ACT is particularly worse position than say Sydney or Melbourne or Adelaide but not as well positioned as Perth or Brisbane where those economies are getting a direct stimulus from the resources boom.”

Time to start strip mining the National Park ladies.

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11 Responses to
More houses for the ACT … rinse and repeat.
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Stanhope’s an idiot, with no real understanding of the basic property market if he said that.

farout 2:20 pm 30 Apr 08

Stanhope said it, so it must be true.

thetruth 1:42 pm 30 Apr 08

What i don’t understand is that Stanhope said that supply will exceed demand… how many canberra householders will be trapped by having a house with more debt than it is worth.

Rent control is a dangerous game to play, because it discourages investors from owning the property, which means tax deductibility of repairs and maintenance is effectively lost, and so doesn’t get done. Also, if an investor already owns it they are much less likely to maintain or improve the property if they can’t recover additional rent. It effectively distorts the market, which results in sharp corrections further down the track.

The best way to keep rents under control is to have enough supply that landlords compete for tenants by offering good deals. The problem, of course, is that everyone wants to live walking distance to a major town centre, and pay bugger all for it (“I don’t have car”, “I can’t ride a bike”, “It’s too far out”, “It doesn’t suit my lifestyle”, etc etc…). The reason why nice inner city properties cost lots to rent is because there’s more potential tenants than properties!

(Which is why I buy inner city properties).

farout 11:24 am 30 Apr 08


farout 11:21 am 30 Apr 08

blocks of apartments where rent is “controlled”

you mean like Lyneham Flats?

Great, lets have more ghettos. We can always do with a fre more Charnys.

Yep, reduction in stamp duty will result in overall prices moving up by a similar amount. The only real solution is to release more land. Of course, it will take some time to build the new dwellings, but over time it will reduce pressure on prices, especially in outer areas. If local govco was REALLY cluey, they’d offer additional rebates or benefits to investors who built new dwellings (thus increasing supply), which could then be rented by Canberrans who can’t or won’t buy a home themselves.

Mr Waffle 11:11 am 30 Apr 08

Woohoo, I’ve been going far too easily through morning traffic recently- I can’t wait for it to slow down even more, it’ll feel like I’m in a real City!

ant 10:26 am 30 Apr 08

They have GOT to stop builders and developers buying up the land and building mcmansions on it. The free market isn’t working for the people in this case. The government who controls issueance of the land has to start limiting the price, and what can be done with the land. Even the free-market-loving Yanks recognise this problem, and have properties (usually blocks of apartments) where rent is “controlled”, set to x % of the CPI. (I lived in one-such). Sometimes, the government has to intervene.

Gungahlin Al 8:57 am 30 Apr 08

So the CM believes we could have supply actually meeting demand by this time next year? It’s about time. And as he virtually admitted on 666 yesterday arvo, they and the LDA dropped the ball on this.

[rant /on]

BUT – in the meantime they continue to crank up demand for land, in order to drive prices ever upwards, thereby undoing everything and then a heap that the much-touted “Affordable Housing Taskforce” can do.

I am amazed to see the LDA spending tens of $000s promoting the next land ballot for Franklin (288 blocks) in papers and on TV, even though they already have more than 500 families left over from the last ballot!

You can’t tell me the LDA is spending that money just for flag waving. If they continue to drive demand up, the next lot of blocks they have “valued” by their “independent” valuer prior to setting the prices for them, will of course be set even higher “because land values have increased”. Let’s just try to ignore the fact that it was the government and their agencies that created that very situation in the first place…

Meanwhile the Liberals are focussing on their stamp duty idea, worth maybe $10-15,000, except as I’m sure VY will confirm, that it will just result in drive propoerty prices up further, as happened with the Liberal’s first home owners grants.

To give an idea how much more impact the valuations are having over piddly stamp duty, the Franklin equivalent of my block in Harrison, just 12 months on from our purchase, was $30,000 more.

And on stamp duty, there’s another issue people ignore – it goes on house and land. So if you buy a house/land package from a builder, you pay stamp duty on the lot. But if you buy your block yourself, then get a builder, you only pay stamp duty on the block. (You get to pick/design your own house too, rather than accept the woeful and inefficient designs the builders pulp out.)

[rant /off]

OpenYourMind2 6:17 pm 29 Apr 08

And where is the extra water coming from?

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