House prices to rocket on frog

You know the Melbourne housing market is in trouble when (h/t LBS):

Developers say property prices in Melbourne’s urban growth corridors may skyrocket because of an endangered frog.

A draft report released under new Federal environment laws has recommended some growth areas be off-limits to developers to protect the growling grass frog.

Developers say the plan, a national first, does not give them any certainty, but frog experts say it is a good compromise.

Melbourne’s outer suburbs are growing faster than anywhere else in Australia and involves moving into territory occupied by the endangered frog.

Urban Development Institute of Australia executive director Tony De Domenico says it could add up to $10,000 per block of land.

“That’s not me being alarmist, this is occurring inside what was supposed to be an urban growth boundary,” he said.

“So in other words in 2002 when the Labor Party put an urban ring around Melbourne, they said anything within that ring is developable.

“Well that’s been not the case because now we’ve got some landholders losing up to 40 per cent of their land entitlement because of one form or another of something.

“We need to be protected.”

Mr De Domenico says the costs of conservation should be shared.

“Why should the first homebuyer be stuck with the bill of protecting an endangered species, if the species in fact endangered? All of the community should be paying for its protection,” he said.

“If it’s on land that’s not developable, the Government should then buy the land back from, whether it’s the farmer or the developer, and look after the land it deems to be infested by an endangered species.”

Comments

  1. great!
    now all we need is for these frogs to appear all around major cities, then we won’t have a housing price fall.

    • I can see the headline now…

      Police catch Real Estate agents releasing frog spawn into urban growth areas in plot to restrict supply!!!

    • Yes, perhaps Bernanke should have helicopter dropped frogs. I predict Amphibious Easing III by Q212.

      BTW, what’s with the comment “infested by an endangered species”? Just like those tiger, panda, dugong and polar bear ‘infestations’ we all have to deal with I guess.

      IMO it’s still better than the habitat being infested by the growling Falcons and annoying buzzing of the common Cruze.

  2. As ridiculous as it sounds – there is some truth to it.

    Someone posted on here a while back how developers are forced to keep a % of open space depending on how many endangered frogs/grasses/mortgages/flies the environmentalists find on a given development site.

    If you were a developer, and you purchased 200,000m2 of land. You might expect to subdivide into 300 lots of land (450m2 blocks, and 200m2 of public space). If you suddenly need to leave more public space (i.e. 250m2, and extra 50m2 a block) then you can only fit 285 lots onto the same space.

    Given developers have a fixed costs (i.e. purchase of raw land, council applications, building of roads), then it would naturally push up the cost of each lot.

    However the fact they try and make development margins of 20-40% per lot on a subdivision could be questioned….

    • I reckon that the frogs should be paying for land the same way as people do. Our banks would be more than happy to lend them money if the state or federal governments could guarantee the loans.

    • “If you suddenly need to leave more public space (i.e. 250m2, and extra 50m2 a block) then you can only fit 285 lots onto the same space. Given developers have a fixed costs (i.e. purchase of raw land, council applications, building of roads), then it would naturally push up the cost of each lot.”

      There are two reasons this doesn’t happen.

      1. Developers typically know in advance about these risks and planning requirements (hence their substantial margins)

      2. Even if they really are ‘sprung’ on them, they can’t simply put their price up above the market. They are price takers. The loss is all theirs.

      • But if it wasn’t for the “planning gain” racket, the main cost of a new house (75% plus)would be the structure, and the main cost of each lot would be the cost of development. The contribution of RAW land to costs, is minimal.

        In the healthy free markets in the USA where lots are $30,000 each, it hardly matters how much “land” a developer has to set aside – the raw cost is only around $4000 per acre. If you force the developer to set aside half the land as public reserve, all you do is add $2000 to the cost of each 1 acre lot, or $1000 to each half acre lot, or $500 to the cost of each quarter acre lot.

        This is why “public space” is not a problem in these markets. Dallas is quoted in one study as having the greatest amount of parkland of any city in the world – around 20% of it is parkland.

        What you are discussing here is a MASSIVE problem when the raw land cost has been forced up by the planning racket, from $4000 per acre to $400,000 per acre. The difference is someone’s capital gain, a dead wealth transfer, of no use whatsoever to economic productivity and in fact a reducer of it.

        Worse, it is not just a capital gain to the incumbent owners of the land before developers started crawling over broken glass to get it, the inflated price of fringe development properties multiplies out across the entire housing stock, creating a wealth transfer from every first home buyer or upwardly mobile buyer regardless of where they buy, to older people cashing out.

  3. A good reason to eliminate prescriptive UGBs I would have thought? By all means, let’s protect areas of high conservation value. At the same time, let’s allow development in low conservation value areas outside of the boundary – i.e. to Melbourne’s north and west.

    • Could also allow re-development within existing areas, but there’s a danger the local council could discover endangered fibro houses that need protection…

      • A very good friend of mine is a planner, and based on many converstions with him, that outcome is far more likely than one would imagine…

      • Well he’s anti sprawl, but I’ve often heard him complain about older houses being knocked down and re-developed as well.

        He was talking about looking at a small weatherboard cottage for sale at Penshurst in Sydney (prime area for re-devolopment)the other day, and saying even though it’s not in the Penshurst conservation zone you can’t automatically assume you can knock it down and rebuild. I suggested that’s pretty unreasonable for any purchasers, but he reckons just because you own a place you shouldn’t have the right to do what you want, that any building work should be at the discretion of the council, preservation area or not. I gave up at that point. Unfortunately I think he is fairly typical of the profession.

        Note, I’m actually in favour of preserving genuinely significant or beautiful areas or buildings, but I do think the rules and status should be much more clear cut, and the onus should be on the council to justify why a development shouldn’t go ahead.

      • shouldn’t have the right to do what you want, that any building work should be at the discretion of the council,

        That’s why on 450sqm blocks, i have to dedicate 180sqm fro a front yard, thus allowing only 80sqm for the back hey?

        Talking about elevating oneself to importance.

      • Rusty Penny, yep. Look at any local council control plan, they’ll have all sorts of rules about set-back, to maintain the integrity of the streetscape, and crate a sense of space etc. Hence the frontyard bigger than the backyard phenomenon of modern subdivisions. Yet some of the most expensive and desirable property in the country, which are praised and protected by planners, are old inner ring terraces, with zero or a token setback, have a bigger backyard than many new developments, and have higher density.

  4. All comments sound anti-environmentalist. Is everyone saying endangered species should not be protected? BTW that looks like a motorbike frog (tree frog).

  5. In New Zealand we also have taniwha – Maori monsters- located in the path of motorways that need placating .Tapu (curse) lifting and Maori blessing ceremonies are performed regularly on infrastructure projects.Frogs are pretty mild by comparison really

    • Beware the pathological short-sightedness of real estate developers.

      Are frogs more important than McMansions? Hell yes!

      • there are other options other than building ‘out’. How about up whilst simultaneously improving how parks, pets etc are catered for.

      • StanGoodvibesMEMBER

        Yeah lets carry on with the logic that we live on an unfinite planet with infinite land and resources that we can endlessly keep exploiting/destroying for infinity (and beyond).

        Lets see how THAT works out for younger Australians. I’m amazed that we live in a world that STILL fails to account for the environmental cost in it’s fundamental market model.

        FAIL!

      • and about 80% of the earths land surface is human impacted – and that ain’t working out so good for the frogs by all accounts…

      • Jumping jack flash

        I also heard that the Boomers recently cured death so they could stop their pesky good-for-nothing kids and spoilt grandkids from stealing their properties from them when they died. They worked so hard to buy them you know.

        But a side effect of this was exponential population growth forever. Which means infinite population is then fighting for finite resources and space. And of course this means house prices to the moon.

        The research was funded by the REIA, Gerry Harvey and Kevin Rudd. A couple of banks passed the hat around too.

      • Lorax, are you for real?

        “Are frogs more important than McMansions? Hell yes!”

        Do you practice in front of a mirror wearing black jack boots and a cap with a huge shiny black peak on it?

    • “Beware the new religeous movement (enviro fundamentalism)”

      Mealmatenz its call Global Warming and Carbon Tax…… sorry couldnt resist

  6. FWIW, I reckon its more important to save an endangered frog species than allowing a few bloated McMansions to built on the urban fringe.

    But hey, I am The Lorax after all, and someone has to speak for the trees (or frogs in this case).

    • ” I reckon its more important to save an endangered frog species than allowing a few bloated McMansions to built on the urban fringe.”

      Why? I am genuinely interested to know the reasoning behind this position.

      • Frogs are irreplaceable. McMansions can always be replaced, and can be built elsewhere.

        Economics places no value on the environment, and yet we are utterly dependent on the biosphere. We live on a rock 150 million km from an ordinary star, that through an astonishing sequence of coincidences is conducive to life. We forget that at our peril.

      • So, you are starting from the premise that the McMansions are responsible for the frog being endangered? What if they are not? What if the frog was going to become extinct even if there were no humans on the planet? Species do go extinct all the time, you know. Frogs are always croaking.

        Just because a species is endangered doesn’t mean we are responsible, or should do anything about it. Species turnover is part of the natural order.

      • wow. what if? what if? what if i can think up what ifs to absolve me of all responsibility? fact is, these frogs have lived in australia with no problems for a VERY long time and within 200 years they are endangered. The probability is extremely high that the actions of the last 200 years ARE responsible. And the fact that we are turing their habitat into houses and otherwise trashing it, probably IS the reason.

        “What if it’s not our fault those guys over there are dying from the bullets we are shooting at them. Maybe they are dying of natural causes and it’s just a coincidence. What if they were going to die anyway. It’s not my fault.”

      • Wow danna, what a hysterical response. With responses like these it’s no wonder you can’t have a reasoned argument about our relationship to the environment.

      • danna, your “facts” are just assertions so far. The reality is, you have no idea how long these frogs have lived here. You don’t know what their habitat is like, or whether we have affected it. You’re just jumping on the bandwagon for emotive reasons.

        Come back with an argument after you’ve done some research.

      • sorry jason i can’t reply to alex… alex – it was first recorded in 1790 and was one of the first frogs recorded because of its abundance. it is now endangered. Facts.

      • StanGoodvibesMEMBER

        “Just because a species is endangered doesn’t mean we are responsible, or should do anything about it. Species turnover is part of the natural order.”

        True. True. Don’t forget to include us in that epitaph. We are on the fast track to extinction ourselves, but that doesn’t mean rampant property development is responsible, or that we should do anything about it.

      • Umm, so you assert they have lived there for a VERY long time (your emphasis) and it turns out the evidence is they were seen in 1790? Que?

        It is now endangered – what is the evidence, and what is the cause? Frog populations worldwide have suffered, now believed to be the consequence of a virus. Maybe that is the reason with this species as well.

      • dumb_non_economist

        AH,

        A little unscientific, but I’ll make the call that it’s highly likely that urban development is responsible.

      • Sorry Lorax this doesn’t really wash. We should be treating the environment with kid gloves. By all means have mandated green spaces and areas, protect old growth forests and prevent corporations from polluting the land and waterways.

        But preventing development because of one species seems excessive. You do know that 99% of all species that have ever existed on this planet are now extinct right? With most of them going extinct before Man had even evolved from the great apes! What’s to say these frogs won’t adapt to live in a more urbanised environment?

      • sorry jason i can’t reply to alex…

        alex – it was first recorded in 1790 and was one of the first frogs recorded because of its abundance. it is now endangered. Facts.

      • Straight from the Andrew Bolt playbook.

        So just develop where the frogs don’t live. Is that so hard?

        Humanity is directly responsible for the biggest extinction event since the dinosaurs were wiped out. The current rate of extinction is orders of magnitude above long-term averages.

        We have already seriously f*cked with biosphere. This is grand experiment that can only be run once. We have no idea what the consequences are of massive loss of bio-diversity.

    • I reckon so as well.

      Just because the west has run out of productive industry except for building houses (which lets face it is about the only thing left that can’t be offshored, and don’t the pollies know it) doesn’t mean that we need to sit by and watch our beaches and suburbs covered with hideous residential development and the few remaining natural places left in our cities get the life squeezed out of them.

      And while i’m on the topic… imho ecological destruction is the elephant in the environmental discussion room – it’s going to get seriously ugly long before global warming does.

      • Can you enviro fascists explain what is wrong with humans living at sufficiently LOW density and sufficiently spread out, that we actually “co exist” with nature? Firstly you want us all to live in a concrete jungle hell. Then you use the concrete jungle hell as your imagery for what happens to nature when humans are allowed to spread.

        It is long overdue for the public to wake up to this utter bilge.

      • @Phil – take a breath mate. Instead of name calling (and from my memories of grade 3 this is not really effective in making a case) why don’t you throw a few ecologically diverse macmansion farm examples our way. Love to hear about them.

      • OK, Prince. Sorry, I get wound up when things like frogs and snails are made the pretext for imposing onerous costs on humans, doing economic harm, increasing inequality, decreasing social mobility, and enlarging the bottom percentile of people trapped in poverty. SO, re-phrased:
        Can you please explain what is wrong with humans living at sufficiently LOW density and sufficiently spread out, that we actually “co exist” with nature? Firstly you want us all to live in a concrete jungle. Then you use the concrete jungle as your IMAGERY for what happens to nature when humans are allowed to SPREAD – when it is NOT what happens when humans ARE allowed to spread.
        It is long overdue for the Australian public to wake up to this propaganda coup.

        It shows either how little they know, or how pettifogging their tactics are, if they ask for “examples”. Ironically, the cities in the world that they hate the most for their “auto dependence”, happen to have the MOST of the co-existence with nature that I am talking about, both in massive backyards and in local parkland. Trees, squirrels, birds, frogs, whatever. A large proportion of the suburban areas surrounding New York, Chicago, Detroit, Dallas, Atlanta etc etc etc, would qualify – just spend a little time on Google Earth.

        LA does NOT qualify, precisely because it mostly consists of SMALL-section housing, not large. It “sprawls” only in the sense that its land use is extremely NON-MONOCENTRIC, NOT in its “allocation of land per person”.

      • you think that developers trickle-feeding an extra suburb of mcmansions onto the market is going to increase home affordability ?

      • No, but throwing the growth boundaries out would definitely do it. We have re-run this again and again. It is simply impossible to “corner” all the land, there will always be some modern day Bill Leavitt daring to build affordable fringe housing on land that has not been “cornered”. There is simply no example in the world of DEVELOPERS successfully running a racket in urban fringe land – every single racket is in fact run by urban planners. Developers “COMPETE”. It is planners who racketeer.

  7. Frogs are usually found in water or very wet areas, and the growling grass frog is no different. If the land in question have frogs on them, it’s prone to flooding. Should you build in that area in the first place?

  8. The developers could do what I did, that is, I found a frog in our back garden and because I was worried that we would be over ran with conservationists/Greenies, I quietly picked up the little fella and went to a local pond and returned him there. No one the wiser and the rental property is still worth the same price as it was last week, mmmm maybe not last week or even yesterday!!!

  9. In other news, Melbourne developers are urging the government to introduce a FROG handout of +$10k, in addition to the FHOG.
    .
    Once the bubble burst, the government should also introduce a “greater fool” grant.

  10. What we need, is raw fringe land uninflated in price by “planning gain”, and the legal ability to develop around and beyond areas of nature we want to preserve. When raw land cost is $4000 per acre, the effect on housing affordability is almost zilch, of preserving half, or three quarters, or even more, of the fringe land you are “suburbanising”. In fact, in free markets developers often do this voluntarily to create amenity.

    But the effect of the growth constraint racket, is to make a one eighth of an acre section $200,000 instead of $30,000, a quarter acre $400,000 instead of $31,000, and half an acre $800,000 instead of $32,000. OR, if regulations mandate the set-aside of “half” the suburb as reserve, this makes the one eighth of an acre section $400,000 instead of $200,000 under the growth constraint racket, versus $31,000 instead of $30,000 under the free market.

    MOST of the enviro fascists propaganda imagery regarding McMansions and ticky tacky boxes and concrete jungles and paving over paradise, is their OWN b—-y FAULT. If we let Frank Lloyd Wright and “Broadacre” rip, we would have humanity truly living in harmony with nature, with the frogs over the back fence and even down the back of your one acre backyard. This is literally how it DOES work in those sprawling, auto dependent US cities with “exclusionary” 1 acre minimum lot sizes. 20% of Dallas is said to be parkland.