Would you like to buy your land over the counter?

johnboy 12 August 2008 22

[First filed: August 02, 2008 @ 09:35
[Second filing: August 08, 2008 @ 19:28]

Mr. Stanhope has announced that “over the counter” land sales will commence from Monday, 11 August.

    Over 100 blocks in Franklin, Bonner and Dunlop will be available for sale over the counter, removing the need for interested parties to register for a ballot or auction to own their own block.

For those who find the concept of buying land this way peculiar it’s only the $1,000 holding deposit that will be needed at the LDA Land Sales and Information Centre located on the corner of Flemington Road and Nullarbor Avenue in Harrison.

Doors open at 8.30am.

If anyone is thinking of camping out to take advantage of this process let me know and I’ll come take a picture.

UPDATED: WIN News is reporting that the process has been abandoned after fears were held for apprentice builders sent to camp out in the cold to secure blocks for their bosses. Instead it seems you’ll need to make an appointment.

All those highly paid public servants and advisors and no-one saw this coming?

ANOTHER UPDATE: Buddingjourno has sent in this comment worthy of wider reading:

    There are going to be so many cranky people in Kingston tomorrow morning!! I went out there today and was given a number close to 100. There are only 100 blocks available and you are allowed to purchase more than 1 so I am already doubting my own chances of actually being able to purchase something. There is no doubt that people are going to show up in the early hours of tomorrow morning and be very pissed off!

    What a joke! How can you change something at 4.57pm on Friday afternoon that affects something that happens before open of business on Monday morning? If releasing 100 blocks of land suddenly over the counter was supposed to be a vote buyer, i don’t think it’s going to work because there are definitely going to be more pissed off people than happy people tomorrow morning.

    I feel sorry for the security guards that had to wait at Kingston all weekend giving out the numbers. From what I heard they copped a lot of flak from angry land buyers already (and they were the ones with numbers and appointment times). I hate to think the flak they are going to cop tomorrow morning.

    Funny though, not a thing was mentioned in either Saturday’s Canberra Times of the Sunday Times. How can this have gone unnoticed, because to me this seems like a massive deal!

UPDATE: Gungahlin Al sent in the following:

    LDA – ripe for a gutting?

    The Canberra Times is reporting today that 33 of the blocks available for over the counter sales yesterday were sold to just three builders.

    Why is this a bad thing?

    Because more often than not, the builders buy job lots and whack up whatever plan they have that fits on the block and with a stack of insulation can squeeze past the minimum star ratings. If the blocks are adjacent, we end up with dumb bland cookie-cutter streets. And forget liveability, or reduced costs of operation…

    The alternative would be people (working families?? 🙂 ) buying a block and working with a builder or designer or architect to come up with a house that will suit the block and maximise passive solar design, and really suit their needs.

    In addition, the builder sells a house and land package, meaning the buyer has to cop stamp duty on the whole lot – not just the land component.

    And maybe there we have hit on the nub of it – the LDA keeps the builders happy by keeping up their shelf stock, and keep the government happy by doubling the stamp duty take.

    I said at the time that Stanhope putting the former Master Builders head John Haskins in charge of the LDA was a “fox and henhouse” move. And I haven’t seen anything to sway me from that position to date. If anything the LDA has become even more wedded to the builders.

    And LDA chief executive John Robertson’s response today that they wouldn’t be changing their system just goes to indicate the depth of the problem at the LDA and with the ACT Government for allowing/perpetuating the situation.

    It’s safe to say I don’t have too many unburnt bridges at the LDA, so I might as well be straight about this: the LDA is ripe for a complete overhaul. There are key people there need to “explore other personal development opportunities” and there are systems and corporate values that need a serious rethink. A savvy government would initiate this before the election, but I suspect it will have to wait until after – so I hope the potential cross-bench candidates are taking notice…? The Act that enables the LDA provides for another 2 board positions – it is time the community was represented.

    And as I write this, Mr Stanhope has just issued another media release trumping the affordable housing initiatives – all of which have been effectively neutered by the market supply manipulation driving up land prices, on which I have written here on numerous times.

    Meanwhile, for those people wanting to sidestep all this LDA nonsense, check out Crace and Casey – one thing Stanhope has got right is to allow these “englobo” sales where the LDA is effectively out of the equation.


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22 Responses to Would you like to buy your land over the counter?
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Gungahlin Al Gungahlin Al 1:56 pm 13 Aug 08

Following on from my article about the land being swallowed up by builders (which was tacked on to this article), I note that Mr Stanhope has been responding to the criticism by saying there are 53 blocks still available.

But what he isn’t saying is that they are pretty much all either awkward corner blocks or have mandatory 2-storey requirements – both of which make them expensive to build one. Therefore outside the reach of many of the people whom are trying so hard to escape the rent trap.

There are times Mr Stanhope, as I’d hoped the GDE issue had demonstrated, when you just have to put the endless spin aside and say “yeah you know there is a problem here, and we are going to fix it.” Take a lesson from Peter Beattie. He didn’t waste stacks of column cms or airwaves thowing more and more words at the same excuse. He just said yep, fixing it, next issue?

OzChick OzChick 5:16 pm 11 Aug 08

JC said :

Now I know that this scheme is a lot different, but from a legal perspective it shouldn’t make any difference to the banks when loaning money. The only question I have is when someone sell a house with land on this kind of lease who is responsible for ‘buying’ the land out. More so in the case of foreclosure.

The lease can be land rented by the new owner of the property, so it will be transferred from seller to buyer. If the new owner wished to purchase the land outright then the block of land will be purchased from the ACT Department of Treasury (the owner)and purchase the house from the seller at the same time.

This scheme will be great for investors though, claim the Land Rent for investment purposes then lets say 10 years later they purchase the block of land from the ACT Department of Treasury for the current market value, and then sell the house with the block of land.

Depending on the length of time that they officially own that land, they have reduced their capital gains significantly… Just lets the governement and the rich (property investors) get richer. IMO.

Thumper Thumper 5:14 pm 11 Aug 08

The house will depreciate while the land appreciates.

Put simply, the longer you are in your house, the less you own it. If you sell then you’re stuffed because you certainly won’t be able to afford to buy back into the market.

This is a really ridiculous idea if you ask me.

hax hax 5:03 pm 11 Aug 08

The only question I have is when someone sell a house with land on this kind of lease who is responsible for ‘buying’ the land out. More so in the case of foreclosure.

Most likely just have to pay the current market value for the land, separetly, and the seller might get a few dollars for the depreciated house.
Actually come to think of it, they’ll probably be stuck there forever and never want to sell because they would just be losing money. But then, imagine in 20 years time when the house is knockdown material and they still haven’t bought the land…

Terrible idea if you ask me, will come back to haunt people in the future.. Didn’t they try something like this back in the 70’s – wasn’t there a reason why they quickly scrapped it?

JC JC 4:46 pm 11 Aug 08

Well actually Cranky everyone in the ACT already rents the land for 99 years. I have a copy of my lease from when I “brought” my land and I recall there is a yearly rent charge of 1c (maybe even $1) that is waived provided you conform to the lease conditions.

Now I know that this scheme is a lot different, but from a legal perspective it shouldn’t make any difference to the banks when loaning money. The only question I have is when someone sell a house with land on this kind of lease who is responsible for ‘buying’ the land out. More so in the case of foreclosure.

kappa kappa 2:40 pm 11 Aug 08

It makes you wonder if this whole exercise is for the builder’s benefit or Canberra’s families. LDA should have restricted land sales to one block per person and excludes builders.

buddingjourno buddingjourno 11:45 am 11 Aug 08

The Canberra Times has finally reported something on this
http://www.canberratimes.com.au/news/local/news/general/buyers-may-still-be-out-in-the-cold/1240507.aspx

I don’t see how this is being handled as a first-come, first served basis (as stated on the LDA website). It is being handled by a ‘those in the know’ get served first basis. They are updating the website every so often with the land that is still available. Anything affordable in Franklin was snatched up before ten this morning, and most of it went to builders (as they had to exchange contracts – so that’s how you can tell). It will be interesting to see how much of the land actually ends up with those it should be intended for, and how much of it (if any) is actually land rented.

I think this whole over the counter exercise will just end up being a revenue raising exercise for both the ACT government, and the four builders that managed to score the first four appointments.

As quoted on the press release for the over the counter sales: “By providing over the counter sales, the ACT Government is providing even more options for home buyers,” Mr Stanhope said. – Right now I don’t feel like there is much option to buy over the counter land. The land that is available is priced so high that the stamp duty would make the land unaffordable and is out of reach for most home buyers (even with the land rent option available).

sepi sepi 9:42 am 11 Aug 08

They truly seem to have no idea.
What are they now going to offer all the people who miss out this morning?

And did it really not occur to them that people might queue up to get something valuable, being sold first come first served?

Thumper Thumper 8:25 am 11 Aug 08

I’m wondering if this government has any idea what they are doing. At the moment they just seem to blunder from onr thing to another with the occasional good thing thrown in for balance.

ant ant 11:14 pm 10 Aug 08

Yes, we definitely need more people. The population is too small.

teepee teepee 9:27 pm 10 Aug 08

I wouldn’t blame the builders either. Be they small or medium or large, they need a forward supply of land in order to have product to sell. If they don’t buy up blocks then they have to sack the apprentices and sub-contractors. ie: The boys waiting in queue are, in a sense, queuing for the sakes of their own jobs.

The blame for this fiasco lies with a government that has quite deliberately kept land supply below demand for almost as many years as it has been in office. The ACT is quite unique in that, unlike other states and territories, there are no other owners of bulk unreleased land. The ACT Government has a monopoly. I understand their proper desire to return some profit, but they are boiling the market dry and many young families will be suffering for decades for the sake of Jon Stanhope’s greed for revenue.

VYBerlinaV8_the_one_they_all_copy VYBerlinaV8_the_one_they_all_copy 8:46 pm 10 Aug 08

Financial derivatives marketed to the unsophisticated = tears before bedtime.

Yep, been shown over and over. There’s a lot to be said for owning your own home (or owning investment property). Renting land, though, seems kinda risky to me. Don’t forget that this was one of the causes of the longstay caravan park ‘issue’.

SheepGroper SheepGroper 8:43 pm 10 Aug 08

So apprentices were camping out to claim blocks for builders, ( wasn’t there criticism of this practice before? ) and a person can buy multiple blocks – sounds like everything possible is being done to prevent the people who were supposed to get these blocks from getting them.

buddingjourno buddingjourno 7:55 pm 10 Aug 08

There are going to be so many cranky people in Kingston tomorrow morning!! I went out there today and was given a number close to 100. There are only 100 blocks available and you are allowed to purchase more than 1 so I am already doubting my own chances of actually being able to purchase something. There is no doubt that people are going to show up in the early hours of tomorrow morning and be very pissed off!

What a joke! How can you change something at 4.57pm on Friday afternoon that affects something that happens before open of business on Monday morning? If releasing 100 blocks of land suddenly over the counter was supposed to be a vote buyer, i don’t think it’s going to work because there are definitely going to be more pissed off people than happy people tomorrow morning.

I feel sorry for the security guards that had to wait at Kingston all weekend giving out the numbers. From what I heard they copped a lot of flak from angry land buyers already (and they were the ones with numbers and appointment times). I hate to think the flak they are going to cop tomorrow morning.

Funny though, not a thing was mentioned in either Saturday’s Canberra Times of the Sunday Times. How can this have gone unnoticed, because to me this seems like a massive deal!

johnboy johnboy 9:48 pm 08 Aug 08

Financial derivatives marketed to the unsophisticated = tears before bedtime.

cranky cranky 9:04 pm 08 Aug 08

How does one rent a lease?

Good grief.

OzChick OzChick 8:56 pm 08 Aug 08

You can also Land Rent the land too, if you wanted to. Build and own a house on a piece of land that you will not officially own, unless you purchase it outright from the ACT Government at the current market value. 🙂

Don’t know how banks would finance this as the house will be a depreciating asset unlike the block of land. Looks like this scheme will mean more $$$ in the pockets of the ACT Government.

Housing Affordability?? I think not…

LlamaFrog LlamaFrog 8:35 pm 08 Aug 08

Don’t blame the public servants, these people were not good enough to join the federal government and you expect them to have the knowledge and experience to be able to do this?

teepee teepee 8:17 pm 08 Aug 08

This queuing is pretty strong evidence that supply is being held below demand. No wonders prices keep going north in this town.

Win said that the officials have now booked an appointment for people who were queuing on Friday. But I bet that won’t stop a new queue emerging tonight or over the weekend for people who weren’t there on Friday.

It can hardly be called an “over the counter” sale, if you have you sleep overnight in mid winter before you get to the counter. That’s an out-the-door-and-overnight-before-over-the-counter transaction.

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