Would you like to buy your land over the counter?

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?

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.

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?

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.

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.

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).

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?

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

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.

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’.