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Simon’s affordability insanity

By johnboy - 22 February 2007 10

The Canberra Times brings news that Simon Corbell has had a brilliant idea to “tackle” the crisis of housing affordability.

He’s going to reduce supply!

Land for public housing could be handed over free in future block releases to tackle the ACT’s growing affordability crisis, says Planning Minister Simon Corbell.

Absolutely brilliant Simon. We take it you’re actually trying to increase prices here as surely you aren’t this silly?

It gets better, they’ve realised that the (also market distorting) “affordable housing” is being snapped up and sold on at full freight so now there’s going to be another layer of price control on those blocks of land.

It all keeps public servants employed, Simon in the media, and property owners smiling all the way to the bank. But if he wants to improve affordability he’s going to have to increase the supply into the open market.

What’s Your opinion?


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10 Responses to
Simon’s affordability insanity
VYBerlinaV8 now_with 10:35 am 23 Feb 07

My grandfather once told me that when he was in his prime (aged 30-50, during the 1950s and 60s), most families would spend 5 years pretax income on buying a house (which took 25 years to pay off), and 1 years pretax income on a car (which took 5 years to pay off).

The house part probably hasn’t changed more the 25% either way, but the car thing has changed heaps. Not many people I know spend a year’s pretax income on a car.

biogaz78 8:55 am 23 Feb 07

I have to agree with Zed on this one. How can the govt categorise a block costing $160,000 affordable? By the time you put a house on it I would say it would be well out of reach for anyone who is in the low-middle income bracket.

I thought the definition of “affordable” was that the house(and land) costs no more than 3 times the annual income of the household.

emd 8:09 pm 22 Feb 07

Must be only the land releases I’m interested in that are managed by developers then.

tommy 6:41 pm 22 Feb 07

emd – i think you’ll find that all land in the ACT (excluding NCA stuff) is being released by the ACT Government and managed by them. Has been for several years.

The smaller blocks mean more ratepayers for the ACT govt too. Thin roads mean less maintenance too.

emd 3:54 pm 22 Feb 07

I reckon more land flooding the market could be a win-win if done right.

At present, land releases are often managed by developers. That means you can’t buy the land unless you buy one of their off-the-plan houses to put on it.

If lots of land were released under the management of ACT Government, hopefully we’d get:
* roads wide enough for buses to pass through.
* blocks big enough for a decent house AND a back yard.
* No restriction on who builds the house. Buy a kit home and DIY if you’re that broke.
* LOTS more rate payers to contribute revenue.

snahon 12:59 pm 22 Feb 07

Perhaps stanhope is chucking a ‘Mugabe’ with our economics but instead of just printing money he’s gonna do a land release to help curb the this sudden accent to housing affordability crisi.

louise 12:35 pm 22 Feb 07

Funny thing, housing (and land) affordability.

On 9 January, the Chronicle reported Stanhope as saying the ACT had the most affordable housing in Australia. Within two weeks, there was a housing affordability crisis, and now the emergency release of land to address it. How could it all have gone so wrong so quickly?

VYBerlinaV8 now_with 11:18 am 22 Feb 07

Rental subsidies are laughable, but they sure suit property investors!

People think land and housing is expensive now, but it’s nothing compared to what it will be in 10 years time, after the next property boom.

Ralph 11:04 am 22 Feb 07

Simple Simon, release land, reduce red tape, and get the fck out of the market! There is no shortage of land in the ACT, we can build right out to the brindabellas.

Howard’s proposed ‘rental subsidies’ is another piece of policy madness.

snahon 11:00 am 22 Feb 07

Complex issue of housing affordability.

Flood the market with land and means test family income to ensure only those on “lower” incomes can get a leg up in the market but that will mean a shortage of builders to build houses on said flood and thus increase construction costs because builders will adopt a take it or leave it attitude.

Drip feed land sales to reduce risk of shortage of construction labour forces larger land prices which builders will ‘pass on’ anyway.

loose loose really.

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