By David Collyer, cross-posted from Prosper Australia
The AFR today reports Brickworks Ltd calling for steep increases in Sydney land supply to assist affordability for homemakers.
Developers on the outskirts of all the major Australian cities are dribbling out lots piecemeal – stifling supply, household formation and economic activity.
It is entirely rational for them to seek to maximise their profits in this way, but I see no reason why state governments should aid and abet this private capture of the future earnings of citizens through staggeringly high land prices.
From The AFR:
The NSW government must release land for new homes 10 times faster to make homes in Sydney affordable for young families, Brickworks managing director Lindsay Partridge says.
One of Mr Partridge’s large builder customers in NSW had 1200 homes waiting to start, but was unable to get the titles on the land.
“Supply fixes all problems. Yes, it is better. Yes, they [the NSW government] are making steps, but nowhere near fast enough,” he said.
“When they are releasing 10,000 lots they need to be releasing 100,000 lots. It is completely out of order by a scale of 10 on what they need to be doing”…
“If they want to make housing affordable for young families the best way is to get the value of the land down. The cost of building the house hasn’t gone up that much. It’s all in the land.”
Exactly. Australia’s property boom is entirely a bubble in land prices. Construction costs haven’t budged for twenty five years.
State government planning constraints and land tax wheezes for developers show they put developer interests above the citizens they are supposed to serve. The heart-breaking part is, no major Australian political party is prepared to do anything about it. This will end with tears of blood – not among developers, but from homemakers shoehorned into tiny over-priced lots at alleged ‘market prices’.
Nevermind these market prices are driven by developer-enforced land scarcity. Our regulations and economic incentives are utterly inverted.
