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Beyond the expected

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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Zed vows to make housing more affordable
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essfer 1:05 pm 26 Sep 11

rosscoact said :

essfer said :

BOHICA.

We can all piss and moan about this until we’re blue in the face. Jon won’t do anything about it, and Zed is nothing but empty words with no policy.

The best we can do is find a way to manage with the cards that they’ve dealt us. I’m not happy about it, especially as I am still battling the over-inflated rental costs in Canberra, but you know what, no amount of whinging is going to change it; so I repeat: BOHICA.

I think you’ll find that the current chief minister is not Jon Stanhope (unless you are talking about a compeltely different Jon)

Indeed. While the face changed the sh*t still smells the same to me. But of course that wasn’t my reasoning, I just made a mistake.

rosscoact 12:55 pm 26 Sep 11

essfer said :

BOHICA.

We can all piss and moan about this until we’re blue in the face. Jon won’t do anything about it, and Zed is nothing but empty words with no policy.

The best we can do is find a way to manage with the cards that they’ve dealt us. I’m not happy about it, especially as I am still battling the over-inflated rental costs in Canberra, but you know what, no amount of whinging is going to change it; so I repeat: BOHICA.

I think you’ll find that the current chief minister is not Jon Stanhope (unless you are talking about a compeltely different Jon)

essfer 11:59 am 26 Sep 11

BOHICA.

We can all piss and moan about this until we’re blue in the face. Jon won’t do anything about it, and Zed is nothing but empty words with no policy.

The best we can do is find a way to manage with the cards that they’ve dealt us. I’m not happy about it, especially as I am still battling the over-inflated rental costs in Canberra, but you know what, no amount of whinging is going to change it; so I repeat: BOHICA.

dpm 8:27 am 21 Sep 11

Cool! So Zed is going to get rid of stamp duty and lower UVs, thus lowering land prices and ongoing rates! Thanks Zed! Looking forward to it…. Bahahahaha!

It’s so true that the govt relies on this for a large chuck of its income. Just look at how UVs magically doubled between 2002 and 2004. You can picture the MLA meeting: ‘We need more money… Hey, lets grossly inflate land value so we cash in everywhere!’ Pity they didn’t think of the ongoing effects this would have on housing affordablility, especially when you add developer profit taking into the mix.

Watson 7:39 am 21 Sep 11

yellowsnow said :

Watson said :

Which is what the current Labor govt is trying to do with the Affordable Housing scheme. I cannot remember the percentage though (and am way too lazy to look for it right now), but it’s less than 20% of properties in all new developments that have to be sold under a certain amount (currently set at $328,000). It’s not much maybe but it is better than nothing. It is the only way some low income families are able to afford buying a house.

I agree this is one of the only effective affordability schemes i’ve come across, anywhere in Australia – Labor govt should be talking more about its successes in this area – there certainly isn’t much more to gloat about! Perhaps they don’t because they know, deep down, that the program has huge problems with compliance. Anecdotally I’ve heard the program is being rorted to high heaven, partly by developers (they ‘recruit’ low income families to pose as buyers etc,), but also by first home buyers who say they’re struggling but actually either work in the black economy with undeclared incomes, or who have just returned from working overseas. I know a few couples who came back from a few years working in London or Dubai on incomes well over $100,000 per year (because money was made OS they’re classed as having nil or negligible income back in Australia, and thus eligible for various forms of support!), buy one of these places at bargain basement prices and with no stamp duty, then a year later rent it out or sell it on, reaping a huge profit. Still, despite the problems there are some benefits to the scheme

The land rent scheme on the other hand is a total sham. Since they lifted means testing on the scheme, I’ve heard of people on huge incomes, who already own $500k homes, talk of using the scheme to rent some land and then build huge, modern houses worth over $600k even without the land. The taxpayer would effectively be subsidising people to upsize to these huge, expensive homes, as govt would be losing income on foregone sale of land (rent paid would not add up land value for 25 years) but would still need to pay for infrastructure up front.

But that is a problem you are going to get with any income-tested scheme? And don’t you have to declare foreign income on your tax return anyway? Though actually, I cannot remember being asked for proof of income when I bought my affordable house! But I might have forgotten as my brain freezes when solicitors start talking in legal and financial lingo.

Also, the stamp duty concession is a completely separate process. Again, the tax evaders can rort it just like they could rort any other income tested scheme.

The land rent scheme has been a flop mainly because most people think it’s a really bad investment. The new house may go up in value for the first few years – as building costs rise – but then it just decreases in value after that. In the meantime your land rent goes up as the land value rises and you are not gaining anything from that rise. I thought about it. I concluded it was slightly better than renting but only because you wouldn’t have to deal with landlords and couldn’t get kicked out. But the mortgage for the house would make it considerably more expensive than renting which means I wouldn’t have been able to save up for the deposit and the extra loan to buy the land. Add to that the fact that only 1 financial institution is willing to give you a mortgage for it and it is clear that financially it just doesn’t make any sense for first home buyers.

Not sure if it’s true that the government loses money on it though. I think the land rent is 5% of the value? That seems like a good return for land that they still own. And they are always going to have to spend on the infrastructure. In this case they just do it before they sell the land, but eventually most of that land will be sold and they will get that money back. But I could be overlooking something here.

gazmant 10:40 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?

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