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Zed vows to make housing more affordable

By johnboy - 20 September 2011 26

Liberal Leader Zed Seselja has announced that if elected he’s going to fix the horrible state of housing affordability in Canberra:

“We already know Canberra is one of the most expensive housing markets in the country, second only to Sydney. It now takes 6.2 times the annual average income to afford an average-priced home.

“This figure is almost double what it was when ACT Labor took office in 2001.

“Canberra’s affordable housing crisis has come about due to restricted land supply, a broken planning system, poor infrastructure delivery, high taxes and a lack of competition.

“That’s why the Canberra Liberals have policies for addressing these issues. These would include a genuine land bank, which would have a pool of land ready to release, with regard to changes in the market.

“Through our Infrastructure Canberra Bill, the Canberra Liberals would also establish an independent infrastructure commissioner backed by an industry board to ensure that infrastructure is delivered in a more timely and targeted manner.

“The housing crisis created by this government is of great concern the Canberra Liberals, and we will take all reasonable steps to improve the situation,” Mr Seselja concluded.

While we wonder just how effective these measures will be we do have to wonder; as there’s nothing there about raising incomes is it Liberal policy to reduce the value of real estate in Canberra?

That would be courageous.

What’s Your opinion?


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26 Responses to
Zed vows to make housing more affordable
wycx 7:00 pm 20 Sep 11

Perhaps Zed has had a chat to Tony about repealing negative gearing and capital gains tax concessions for housing?

Deref 6:08 pm 20 Sep 11

Tch, You’re all cynics! I’m absolutely certain that this would immediately reduce the cost of housing by precisely the value of a politician’s promises.

yellowsnow 4:56 pm 20 Sep 11

arescarti42 said :

This is the problem, we don’t actually have a functioning property market in Canberra (or any other Australian city as far as I’m aware).

A shitty 400m^2 block on the city fringe should not cost $300k, the competitive market price of that land is probably $50-70K.

However the ACT government has two big incentives to try and keep prices high by operating non-responsive land release policies.

1. They rely on land sales for a considerable proportion of their budget.
2. The majority of voters own land and have benefited from increases in its price.

+1

only i’m not sure market value is lower than what govt is charging. Look at how much land is going for on NSW side of border, and also in Sydney. In these cases it’s not the government selling the land but private owners/developers, yet still they charge a similar price. The market price is whatever the market is willing to pay for it, and there seems to be no shortage of takers at the current prices (so far anyway — though i expect there’ll be an oversupply eventually, and a price slump)

of course the govt could always sell land at below market discount rates if it really wanted to make land affordable — but that as you say would lead to revenue shortfalls, as well as political/equity issues. The govt would be seen to be effectively subsidising McMcMansion owners while significantly depreciating the value of existing real estate. Any government that did that probably wouldn’t survive the next election (though with Zed as opposition leader they might)

Bluey 4:24 pm 20 Sep 11

yellowsnow said :

I forgot to mention that the one government intervention that will make Canberra real estate cheaper is if the Abbott Government cuts 12,000 public servants. Prices will plummet, like in 1996 — problem solved. What will Zed spend his days worrying about then? Counting donations from developers?

Thats a big IF and we’re two years away from a Federal election anyway.

MrMagoo 3:56 pm 20 Sep 11

Well for once the Liberal sabre rattling and clenched fist beating upon the metaphoric table top is accompanied by some ‘policy’ in support. As has been my want for a while to see the current opposition actually respond with anything more than gnashed teeth and furrowed brow. However, JB in his post is rather too correct, what say the Canberra Liberals on current land values and salaries within the ACT?

arescarti42 3:44 pm 20 Sep 11

what_the said :

High prices are here to stay, the best you can hope for is that it plateaus for the next 10 years.

Best you can hope for if you’re landholder/homeowner maybe.

arescarti42 3:43 pm 20 Sep 11

yellowsnow said :

I don’t think any policy response on affordability has ever worked before, so the govt might as well stay out if and let the market deal with it.

This is the problem, we don’t actually have a functioning property market in Canberra (or any other Australian city as far as I’m aware).

A shitty 400m^2 block on the city fringe should not cost $300k, the competitive market price of that land is probably $50-70K.

However the ACT government has two big incentives to try and keep prices high by operating non-responsive land release policies.

1. They rely on land sales for a considerable proportion of their budget.
2. The majority of voters own land and have benefited from increases in its price.

yellowsnow 2:15 pm 20 Sep 11

I forgot to mention that the one government intervention that will make Canberra real estate cheaper is if the Abbott Government cuts 12,000 public servants. Prices will plummet, like in 1996 — problem solved. What will Zed spend his days worrying about then? Counting donations from developers?

Bluey 2:13 pm 20 Sep 11

Doc Dogg said :

If you built a suburb of low-cost, poorly serviced housing that only accommodated those people who were truly on low incomes it could be done. It would basically be a segregated community that would be independently priced from the surrounding housing because no one would “choose” to live there.

So relocate everyone from the flats on northbourne to this place and sell the premium land on northbourne to pay for it.

yellowsnow 2:08 pm 20 Sep 11

I don’t think any policy response on affordability has ever worked before, so the govt might as well stay out if and let the market deal with it. Release land here and there yes, and ensure that a large proportion of it goes to apartment and townhouse developments, but no further subsidies please. The ACT govt is already releasing unprecedented amounts of land to developers, much more on a per capita basis than other capital cities, even though our population isn’t growing as fast as some of the others – i doubt releasing land any faster was possible, given the planning and infrastructure required (all of which costs taxpayer $$). New houses are rarely affordable anyway, compared to some of the older stock around. If Zed really cared, he’d force developers to build only townhouses and apartments rather than larger homes. This would increase supply at the bottom rather than the middle and top of the market, which is what is needed.

At any rate, Zed selectively quotes the stats. He does not mention that while Canberra has the second highest median prize after Sydney, according to all the relevant indices Canberra is much more affordable than the other capitals when you take into account our high average income

Rent affordability at lower ends of the market is a more concerning problem — but you’re not going to tackle that by building huge $600k-$1m houses on tiny plots in Gungahlin or Molonglo, which seems to be the dominant type of building activity around the place.

In summary, Zed is a fool and a tool. Is it really that hard to come up with a position that distinguishes the Opposition from its opponents? The Libs neither oppose, nor propose original policy. Just what do they do on their publicly funded salaries? Hopefully they at least read RiotACT and come across my message

gentoopenguin 1:45 pm 20 Sep 11

No political party could make housing more affordable in any true sense because it would mean putting all those voters out of pocket who brought in the height.

Besides, the bubble beast was released long ago due to a number of colliding factors (first home owners grant, rise of China/foreign investment etc). The only thing that can contain the bubble beast now is if the market itself takes a major correction. You’d think this is a point that a Liberal would get. But maybe Zed does and is just playing the electorate for a bunch of fools.

Doc Dogg 1:28 pm 20 Sep 11

If you built a suburb of low-cost, poorly serviced housing that only accommodated those people who were truly on low incomes it could be done. It would basically be a segregated community that would be independently priced from the surrounding housing because no one would “choose” to live there.

what_the 11:53 am 20 Sep 11

arescarti42 said :

“While we wonder just effective these measures will be we do have to wonder; As there’s nothing there about raising incomes is it Liberal policy to reduce the value of real estate in Canberra?
That would be courageous.”

That would be political suicide. I guarantee any action taken by the Canberra Liberals on addressing the housing affordability problem would be every bit as tokenistic as the efforts that have been made by ACT Labor in the past.

Exactly, the only way to bring it down is to distort the market and introduce extremely low cost housing, which will drag the whole market down and lose votes with it. High prices are here to stay, the best you can hope for is that it plateaus for the next 10 years.

Thumper 11:47 am 20 Sep 11

While I agree with his sentiments, I just don’t think it can be done.

arescarti42 11:30 am 20 Sep 11

“While we wonder just effective these measures will be we do have to wonder; As there’s nothing there about raising incomes is it Liberal policy to reduce the value of real estate in Canberra?
That would be courageous.”

That would be political suicide. I guarantee any action taken by the Canberra Liberals on addressing the housing affordability problem would be every bit as tokenistic as the efforts that have been made by ACT Labor in the past.

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