Will the scorching housing market force government to boost land releases?

Ian Bushnell 12 August 2021 26
Housing development

New housing at Coombs in the Molonglo Valley, where more land releases are planned. Photo: Michelle Kroll.

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.

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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.”

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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.

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26 Responses to Will the scorching housing market force government to boost land releases?
Salima Haidary Salima Haidary 9:43 am 14 Aug 21

The government passes the lands to big builders. Who will will sell the house and lands back to the public by the millions. They won’t give the lands to families.buying a land now is like winning a lotto. Thanks to the government

Toshak Akita Toshak Akita 8:03 am 14 Aug 21

Been on a drip feed for years, wont change anytime soon.

cranky cranky 7:06 pm 13 Aug 21

ACT Gov sold a low level govvie yesterday for 840K. One would suggest that that amount would build almost 2 new social housing units on land already owned by the Gov.
Does this ever enter their mind? Or is the money immediately allocated to the wretched tram?

Alex Troy Elsworth Adkins Alex Troy Elsworth Adkins 4:58 pm 13 Aug 21

The lack of strategic planning in Canberra means there is only a very limited amount of land for release. It benefits the government coffers to drip feed the market and maximise land prices, so I doubt they will be in a rush to release more land but the lack of long term strategy is worrying.

David Hennessy David Hennessy 4:26 pm 13 Aug 21

We have a ton of space if we shrink Namadgi or start building into green belt areas. It just won’t be pleasant anymore. It would be better if we improved our public infrastructure to parts of NSW adjacent to Canberra so people could have land and big houses and jobs in Canberra. But that’s not politic and it’s an impost on Ken Berrans who have to live in dog boxes and fund the nanny state.

Justin Watson Justin Watson 3:48 pm 13 Aug 21

There are a few issues. Everyone want houses on large blocks, but to do that requires more urban sprawl, which means taking up more space, whcih we don't have a lot of in the ACT. Then if we do that, we need more infrastructure to support the larger city footprint, which in turns means even higher rates. Its actually cheaper for rates payers to pay for light rail and apartments, than it is to pay for all the infrastructure required to build new suburbs further out.

    Geoffrey Bell Geoffrey Bell 6:19 pm 13 Aug 21

    Justin Watson People can have the large block of land with a house on it. They just need to have the huge income to support the large loan which comes with it. Things have changed in the property market and I think people havn't quiet got their heads around what has been happening. Watch the FOMO once this covid lock down unwinds.

Jason Todd Jason Todd 1:36 pm 13 Aug 21

they wont, they want 70% of new house to be apartments. it their plan they took it to an election. Canberrans voted for more expensive houses and more apartments.

Alicia Conley Alicia Conley 12:46 pm 13 Aug 21

Maybe they need to learn how to govern the current population properly first.

Don't increase our numbers if your health care, transport, prison, schools, social housing.. ect.. is all FAILING

    Justin Watson Justin Watson 3:51 pm 13 Aug 21

    Alicia Conley The ACT has very little control over population though. To stop people wanting to move here, they'd have to make the city less appealling which would affrect us all.

Ian_ M Ian_ M 11:30 am 13 Aug 21

Even if the ACT does release new land, it will stake two to three years before it comes on the market as a blocks, and subsequently being able to be built on. In that time house prices will have increased again and new land blocks will increase proportionally. The ACT government in clueless in how to address the problem. How about they give some serious thought to allowing (within reason, e.g. size, location, etc.), existing blocks to be subdivided that are not in RZ2 zones. And while they are at it do this without charging a lease variation fee. They will get the extra taxes without being greedy – apologies we are talking about the ACT government here – any reason to fleece property ‘developers’ is their mantra.

Robert Honeybone Snr Robert Honeybone Snr 11:24 am 13 Aug 21

Canberra has plenty of land only it’s not been managed properly

    Ben McQualter Ben McQualter 12:40 pm 13 Aug 21

    Robert Honeybone Snr id rather we kept the bush intact instead of trying to fuel the ponzi scheme of perpetual growth

    Justin Watson Justin Watson 3:50 pm 13 Aug 21

    We don't have unlimited land though, we could build on in now and then what? We have this huge urban sprawl of a city like Sydney full of traffic chaos.

Gabriel Spacca Gabriel Spacca 11:17 am 13 Aug 21

Which will be snapped up by developers, who will build medium to high density housing that will be purchased by investors buying their nineteenth investments properties that will be put out as a rental and that will further exacerbate the lack of affordable housing in the ACT.

    Geoffrey Bell Geoffrey Bell 6:09 pm 13 Aug 21

    Gabriel Spacca The rental market is super tight as NO investors around. They have all sold up and cash out. If so many investors around. How come only 33 for rent in Tugg area - 29 in Weston Creek area and 73 in Woden area.

    Nick Savino Nick Savino 8:46 pm 13 Aug 21

    Geoffrey Bell thanks for that

    Geoffrey Bell Geoffrey Bell 10:45 pm 13 Aug 21

    Nick Savino Check on Allhomes - easy to watch each day. I just find it interesting the mind set so many people have and the comments that they make in the property section on - The RiotAct. I am interested in your thoughts are on the current market?

    Geoffrey Bell Geoffrey Bell 10:57 pm 13 Aug 21

    BTW i don't really follow Nth of the lake in rentals or for sales. More interested in the South side as i live in that area.

    Nick Savino Nick Savino 11:40 pm 13 Aug 21

    Geoffrey Bell why invest here the land tax puts me off for apartments

    Geoffrey Bell Geoffrey Bell 12:22 am 14 Aug 21

    Nick Savino Steer clear of apartments - the money is in the land. If you can hold for over 5 years i think you be sitting pretty and can cash out for a nice profit.

    Mat Mat Mat Mat 11:36 am 14 Aug 21

    Nick Savino not to mention body corporate rates 😑... def stick to land...

Trish Casey Trish Casey 11:06 am 13 Aug 21

Families don’t want to live in apartment blocks

    Teresa Layton Teresa Layton 11:09 am 13 Aug 21

    Trish Casey agree. According to Barr they are building apartments because the demand is there however the demand is there because they are not giving people any option 😡

    Geoffrey Bell Geoffrey Bell 11:03 pm 13 Aug 21

    Trish Casey Revenue is in having heaps of apartments and so more cash flooding into the Labor/Greens government coffers. If YOU want to make money, buy land and in 5-20 you be sitting on a gold mine - Easy to work out :)

Terry Cooper Terry Cooper 11:02 am 13 Aug 21

Only if they can smell a dollar in it....

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