House hunters and builders alike are keenly awaiting details of the ACT Government’s Indicative Land Release Program to be announced with the upcoming Budget on 31 August.
As the hot Canberra housing market continues to soar to new levels, forcing many to adjust their expectations as they scramble to find a suitable property they can afford, the pressures are building for more land to be released to increase the number of homes being built.
Chief Minister Andrew Barr said the government faced a challenge to keep supply up to meet the intense demand but kept his cards close to his chest when he took questions at the State of the Territory address on Monday (9 August).
Calling the combination of record low-interest rates and cashed-up Australians captive in their own country a perfect storm, Mr Barr told business leaders that the government couldn’t just ‘magic up’ land.
“But what I can do is lay out a very clear framework for where development will occur and why, and it’s in the town centres, along transport corridors, and new estates in Gungahlin, West Belconnen and the Molonglo Valley,” he said.
There have been calls for many years for the government to boost the supply of land for housing, particularly stand-alone homes, which have put on more than 20 per cent in value over the past year.
Mr Barr did not say if the government would respond to the scorching demand with an accelerated program, but a spokesperson said later that more land would be released for stand-alone housing in the Budget.
“The program for future housing supply aims to exceed projected future demand and provide a diversity of new homes to cater for Canberra’s changing population,” the spokesperson said.
That included long-term planning for new residential areas to the west of Canberra but not in national parks, the water catchment or severely bushfire-prone areas.
But the spokesperson reiterated government policy to favour infill development, where at least 70 per cent of new homes will be built within the existing urban area.
“The options for urban sprawl are very limited,” the spokesperson said.
“Remote and disconnected land is very expensive to develop into serviced housing estates and would not lead to more affordable land coming to the market.”
Mr Barr said increasing infill housing also had its challenges, saying often the community was divided on these new developments.
“In some parts of the city, they’re more welcoming than others to additional fellow residents,” he said.
“Some parts desperately want that demographic change and increase in population because it underpins the businesses in those areas.”
The government was also committed to providing a greater diversity of housing types, including townhouses and compact dwellings to suit downsizing and allow singles, couples and “empty nesters” to stay in a local area but in a smaller home.
Mr Barr said the current strong demand could not last forever, and the closure of international borders meant a slowing of population growth that would flow through to the housing market.
But he acknowledged that a pickup in interstate migration due to the lure of employment and quality of life that the ACT was actively promoting could maintain the Territory’s 2 per cent population growth.
The intense demand for homes is also feeding an extremely tight rental market and nation-high rents, putting pressure on those on fixed and low incomes.
Welfare groups have been calling for the government to respond by boosting the amount of social and public housing being built.
But Mr Barr’s spokesperson said the government would stick with the current settings in its Housing Strategy and the Parliamentary Agreement to deliver 400 additional public housing properties and set a goal of 600 additional affordable housing dwellings by 2025-26.
The government also includes a target of 15 per cent of residential releases in the Indicative Land Release Program to be for community, public and affordable housing.