Sales crash in Melbourne housing estates

By Leith van Onselen

The Age’s Chris Vedelego continued his fine form in a report yesterday on the looming disaster facing new housing estates on Melbourne’s fringe. Below are the main extracts, although I highly recommend that you read the full article for yourself:

Melbourne’s outer-suburban property market is facing a serious slump as distressed buyers and builders cancel one in every three new home purchases.

The collapse in sales could have serious repercussions for the state economy and the building industry, which employs more than 250,000 Victorians.

“We’ve never seen this before, so it’s a very strong signal that the fundamentals are wrong,” said Colin Keane, director of analyst group Research4, who compiled the new research.

He said the current cancellation rate of more than 30 per cent compared to an average two years ago of about 5 per cent.

Developers have had nearly 1800 lots returned to them this year as buyers have aborted plans to build homes in the city’s housing estates, according to the National Land Survey Program.

While buyers who walk away from sales are losing their deposits, developers are left trying to re-sell the land as demand wanes.

The cancellation rate on land deals hit more than 30 per cent in the September quarter, up from an average of 5 per cent before the 2009-2010 property boom ended. It had been averaging about 23 per cent over the past year…

“It also doesn’t help that the prices being charged for the land rose way too high, too fast when these blocks were being sold 12 or 18 months ago.”

Others buyers have had to walk away from settlements – and much larger deposits worth up to 5 per cent of the purchase price – after failing to get financing on blocks of land that have lost 10 to 20 per cent of their value since they signed the contract.

The problem has worsened despite some developers reportedly offering big cash hand-outs in a bid to help buyers make up the difference between what they initially agreed to pay and the land’s current value when qualifying for a loan.

“The developers are basically trying to buy their settlement. It’s easier to pay them the difference than to try to sell the block again,” said a valuer, who asked to remain anonymous…

Industry lobby groups have also been calling for a boost to the First Home Owners Grant for new homes, which was slashed from $20,000 to $7000 in July.
To say that Melbourne’s construction industry is in deep trouble is an understatement. Following the expiration of the $13,000 first home bonus on 1 July 2012, new house sales have crashed as have dwelling approvals (see below chart).
The number of Victorians employed in the construction industry has also fallen sharply, with-38,500 jobs lost in the year to August 2012 representing -17% of the state’s construction workforce (see below chart).
The sharp decline in sales have come despite developers offering generous incentives in an attempt to entice sales, including giving away new cars, offering large cash-backs, free landscaping, or paying a buyer’s energy bills for three years when they buy a new house and land package.
However, as explained in my recent article, The house and land value trap, such incentives are actually impeding the functioning of the new home market, and straight price reductions are required to get sales moving:
A buyer of land that comes with an incentive, such as a new car, pays stamp duty on the higher contract price, resulting in more stamp duty being payable than if the price had been lowered by the amount of the incentive. Moreover, when the buyer seeks finance, the bank is more likely to value the property at a lower level than the contracted price, thereby reducing the amount that the bank will lend and effectively increasing the borrower’s required deposit…
Australia’s property development industry appears to be caught in a pincer. If they don’t abandon incentives in favour of transparent land price deductions, financing of new house and land packages will remain problematic and sales will likely continue to struggle. At the same time, reducing the listed price by the same value as the bonuses and incentives being offered could lower their collateral value, potentially triggering the banks to call in more equity from bank-financed developers to bring their loans back to agreed conditions and/or loan terms. Straight price cuts are also more likely to aggrieve recent purchasers that paid higher prices.
Ultimately, the core problem with the new house and land market in Australia is that prices remain above what many buyers can afford or are willing to pay. And until prices deflate, the rate of home sales and construction activity is unlikely to rebound materially, leaving Australia’s property developers holding large land banks that they cannot offload.
On the last point – high land values – the next chart tells the story. Despite deflating over the past two years, Victoria’s overall residential land values remain by far the highest in the country at 2.6 times gross state product (GSP), versus a national average of 1.9 times GSP (see next chart). While this comparison does not relate directly to vacant land values on the fringe, it does show how over-valued residential land values have become in the southern capital.
Until land prices deflate to more reasonable levels, new home sales in Melbourne (and elsewhere in Australia) will continue to disappoint, requiring continual band aid ‘stimulus’ from the government (e.g. increased first home buyers grants) to get sales moving (albeit only temporarily).

Twitter: Leith van Onselen. Leith is the Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. Click for a free 21 day trial.

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  1. Free_Market_Delusion

    Chris Vedelego is I think the only MSM property person I actually read regularly. He is actually reporting not spruiking.

    • darklydrawlMEMBER

      Unfortunately I don’t have any insider contacts left at The Age, but I would just love to know how Chris and Dr Wilson get along at the Fairfax Xmas Party.

      I have to agree Chris has been consistently solid with his reporting – rarely sensational and often a lone voice in a sea of churnalism. Great stuff.

      • But the developer-land bankers are just the meat in the sandwich. Urban planning forces them to engage in war to the death with each other. If you don’t land bank and outbid your competitors for land banks, you don’t have a business.

        Ironically, it is the “free to develop” local economies in the USA, where people don’t bother to land bank, and developers just watch out for farms coming up for sale at normal farmland prices. A few minutes drive from the urban fringe is far too much land for anyone to “corner” the supply of.

        This results in “splatter” development rather than contiguous, but the consensus in the expert literature is that splatter is actually more efficient in the long term. The best use of land can be decided after some development has already occurred around and beyond it; and participants in new agglomeration efficiencies are not “priced out” or excluded by sheer lack of spare land in the vicinity.

  2. reusachtigeMEMBER

    This is good news. Hopefully it well help speed up the rebalancing of housing to levels people can actually afford.

  3. Thanks Leith. Lets hope the MSM pick up your post.

    The fact that CV’s story is not visible on his employers website is puzzling.

    The Age’s property section appears to be too busy with 10 day old gardening stories and non-stop lobbying for a Christmas interest rate cut.

    • GunnamattaMEMBER

      Little things like that (last I saw yesterday afternoon it was lead on front page with 100+ comments) are the reason why when the Age goes behind a paywall in a couple of months I wont be following.

      • +1. The only loss will be Chris Vedelago. News Ltd would be wise to snap him up as they did Jessica Irvine who has also been known to report facts and write articles that aren’t a spruik fest.

        • Interesting chronology with CV’s story.

          28/11-2.45pm Story posted as lead on Age website
          -5.50pm Story disappears. 136 comments
          29/11-8.15am Story reappears, now in property section with comments disabled. At some point after this link added to Business Day section, where comments are re-activated.

          I don’t know if CV has any input into this editorial shell-game, but it is not assisting his readership.

  4. ‘buyers to put down only a $500 or $1000 “holding deposit” on a block’

    That’s a pretty low premium for that call option.

    • Yes, and it is absolutely asking for cancellations at the first sign of trouble. Australia does not have the even bigger “asking for trouble” factor that California had – no-recourse mortgages.

  5. “We’ve never seen this before”
    Yes we have – and it will happen again. It will give the market temporary access to lots at reduced prices but cause a shortage in 5 yearsas developers opt to channel their funds into more productive areas.
    Small leveraged developers will be vunerable due to the lack of geographical spread in their land holdings.

    • “…as developers opt to channel their funds into more productive areas.” So where they are, now, is not productive then! Exactly…..

      • Janet if they already own a subdivision that isn’t selling they won’t start a new subdivision in that area. A large group will just look for opportunities in other parts of Australia.

        The smaller localised developers will be vunerable if they are highly leveraged. Will they discount their lots, or just sell the whole subdivision to a larger player who will hold until times change?

        This is just part of out tide in tide out housing pattern that creates booms and busts. In effect it’s a return to a normal cycle.

        • And I understand why you believe that, Peter. I differ with you in only one respect; that ‘the cycle’ is over……

        • “In effect it’s a return to a normal cycle.”

          You are right about cycle.

          Cycle: a course or series of events or operations that recur regularly and usually lead back to the starting point

          Now housing is going down to the starting point.

          So you are predicting 40-50% fall (in real terms).

          • For the first time in years I am quite comfortable about where housing is heading. There will be discounts in the outer ring areas of Melbourne, but not so much in the inner suburbs where everyone wants to live.

            I’ll leave it to others to make ridiculous calls on housing rav, someone always does.

          • Cycles in real estate come in all sorts of varieties. I am picking that Australia is on its way to behaving like the UK, as opposed to crazy over-building markets like Ireland and Spain.

            It is very hard to pick whether Australia has under-supply or over-supply due to the volatility of the effect of small changes in occupants per dwelling and household formation rates. The “bust” from this cycle might be volatile, but future cycles, if the UK is any guide, will involve relentless under-supply, relentless rises in “planning gain”, relentless unaffordability, rising exclusion from home ownership, falling household formation rates and birthrates, and not much volatility on the downside. This is because like the UK, Australia’s underlying problem is fanatical growth-constraint urban planning.

          • Phil Australia is also like the UK in that it uses immigration to help prop up the giant debt bubble of property. If we slowed down there it would help relieve some pressure as well.

          • I’m afraid that you might be right Phil – at least we don’t have the strict heritage regulations that stifle much development (some but not as strict)

          • @phil

            current state of housing market:

            home supply: ~156 000 new homes pa
            home demand: ~110 000 new households pa

            home replacements: ~10 000 homes pa
            holiday/2nd home demand: ~6 000 homes pa

            overbuilt: 30 000 homes pa

          • Raveswei; But how does the rate of household formation in Australia compare with, say, Texas where housing is affordable?

            How do we know the rate of new households of 110,000 per annum, is not a low and suppressed figure because young people simply cannot afford their own home?

            This fallacy leads the British into all sorts of unjust assessments. Their average age of a first home buyer is 39 years and around a third of people rent all their lives. The rate of household formation is of course artificially low, yet this rate is used to justify the supply constraints.

            This is putting the cart before the horse.

          • Rate of household formation is actually higher in Australia than in Texas. Between 2000 and 2010 average household size in Texas increased (from 2.74 to 2.78) despite very low house prices, booming economy and being higher than in other places with similar demographics.

            It is completely wrong to think that ability to own a home reduces household formation rate.

            There is no proof that household formation rate is suppressed in places with expensive households. Buying a house is not the only way to form a household. In fact, buying was and still is the the least likely way to form a household.

  6. Look at the chart with residential land values – Victoria still leads the pack. Leith, I strongly agree with your thesis about land expenses being ridiculous, Leith. I was in and around Ballarat on the weekend visiting friends and was amazed to see that $200,000 could buy you a quite reasonable house on a big block up there – that amount of money wouldn’t even pay for the land on some crappy fringe estate in Melbourne. If I was a first home buyer I know where I’d be heading… green fields estates are rip off when you consider the better value of the regional cities and the fact that you can commute by train to Melbourne if you have to.

    • GunnamattaMEMBER

      I have looked at Ballarat too. Why anyone would pay 400K+ to live at Melton or Tarneit, in a slap up BV on a postage stamp when you can get a clinker brick 3 bedder in Ballarat for circa 250-300K is beyond me.

      • I took a long hard look at Ballarat too (beautiful houses) but, alas, couldnt get the commute to work for me. Wouldn’t it be nice if our population & businesses were distributed more evenly, a la Western Europe.

        Regarding the cancellation rate – the discounts/incentives are failing to flush out enough potential buyers with more than $500/$1000 to put upfront. In other words, there aren’t enough buyers at these prices. I think the first home owner market is now scraping the bottom of the barrel, so to speak.

        • Exactly, Friendship7. It is remarkable to see all the little communities scattered around the countryside in Germany, for example, where half the residents work in a factory or office park sited right there.

          You are also right that the market in Aussie has long since topped out the supply of cannon fodder first home buyers. The last few percent of inflation huffed into house price bubbles is always by speculators.

          • What is really odd is that Australian companies seem to lack the imagination to take advantage of this situation. Take Carlton for example. They are sitting on land worth a very large fortune in the form of their Abbotsford brewery site. You would think it would make perfect sense for them to consider relocating to Ballarat and flogging off the expensive inner city land. No sign that they have even noticed.

        • I have commented before that one of the things needed to address land values in Australia is by implementing more satellite cities, linked by decent infrastructure.

          While I agree with Leith’s idea that urban boundaries in their current form lead to inflated land prices, the reality is that dropping urban boundaries around the capital cities is not going to fly. For starter’s it’s politically unpopular and more importantly, it puts excessive strain on the community by breaking social ties, moving further away from services and more reliance on the car (with all its health and environmental issues).

          More city centres, a la Western Europe, will increase livability exponentially and open up enough land to take away upward pressure on prices.

          • +1. Government should be showing strong leadership on this but don’t hold your breath. Too many pompous, inner city living, academic snobs who see the regions as beneath them in decision making roles for that.

            We might find that private enterprise ends up leading the way when the cost of running businesses in expensive, congested cities becomes unbearable.

          • It’s why I’m a fan of the NBN Jimbo. I’m hoping that will allow businesses to set up shop in regional areas…

          • “…..dropping urban boundaries around the capital cities is not going to fly. For starter’s it’s politically unpopular and more importantly, it puts excessive strain on the community by breaking social ties, moving further away from services and more reliance on the car (with all its health and environmental issues)…..”

            This is commonly believed, but it is shallow assumptions not based on data. The US cities with low density and total freedom of fringe development, work perfectly well. Employment and services all follow the people. Trip times are lower than planned high density cities. And access and amenity is “democratised”, in stark contrast to the strict “sorting” of access and amenity by what people can afford, in planned cities with forced higher density and high land prices.

            There is plenty of research now from UK academics. The lower someone’s income is, the more likely it is their home will be smaller, older, lower quality, further away from employment opportunities, further away from green space, further away from services, further away from schools (especially good ones), further away from places of entertainment and culture, suffer higher local pollution, suffer higher local crime and delinquency, and so on. It is also more likely they will never marry/have children. In contrast, in affordable US cities, even with low density, a far HIGHER proportion of people, down to much lower income levels, live in homes that are (by comparison) larger, newer, higher quality, located efficiently relative to job opportunities, located conveniently to green space, services and good schools, have lower local pollution, and less crime. Far more people have marriage/family opportunities.

            The underlying reason is that things are dispersed, the land value curve is very flat as well as being very low, and moving closer to almost anything you want to, is not prohibitive in price. Furthermore, trip times by car are far lower even if distances are greater, and local air pollution from cars is lower even if the total CO2 emissions might be greater.

            The so called difference in “waste” between the high density, unaffordable housing, planned city, and the low density, affordable housing, free market city, is entirely due to discretionary spending, not urban form at all. Households in the former simply have far less money left over after housing costs, to buy more wasteful cars, to do more discretionary travel, to use more energy at home, to form households at younger ages and have more children.

            All that is necessary to improve this and have the best of all worlds, is to have free markets in urban land AND tax petrol enough to change behaviour re choice of cars and discretionary travel. This has been the consensus among urban economists for literally decades. Growth constraint urban planning to conserve petrol consumption in cars is like shifting the picture on a wall by moving the wall instead of the picture; this analogy is from “Still Stuck in Traffic” by Anthony Downs (2004), a book that all “planners” should be required to read, along with a few others I could name.

          • I like the “move the state administrative/government function to a regional centre” concept.

            Didn’t they used to do that, then centralise to reduce costs ?

    • Ditto many parts of Geelong. It’s a tough commute though. I’ve got a mate who tried Sunbury for a couple of years and had to move back to the middle ring.

      A faster (HSR), more reliable rail network would solve Melbourne’s problems in a flash. We missed an opportunity in favour of $80B worth of NBN, FHOG, pink batts, school halls and every other comlpete waste since 2008.

        • It should be but I don’t see the masses making the transition to telecommuting. In fact, in my experience the organisations that should be showing the most leadership on these matters e.g. Government, are pathetic. Take the ‘work from home’ option for instance. Those that achieve it have to fight tooth and nail for it or have some other compassionate reason e.g. recent parenthood. Either way only a minority get access to it. But we digress.

        • If the NBN is a solution to anything it would be a good start.

          It certainly is costing enough to solve SOME kind of problem, at least. Would be very good if those costs and the governance were transparent, along with a CBA just to see what all the money actually gets in return.

    • Pointe Gourde Principle

      Below is an article from The Age last weekend about Bendigo – apologies if it has been already posted somewhere else.

      I definitely think that the transport improvements (trains to regional Victoria) from the last decade are starting to pay off for some of these centres.

      Plus, these cities have shed their “rust-belt” tags and have developed real services and amenities. An influx of students probably helps as well.

      • Absolutely, Bendigo is another great example. A couple of weeks ago I had the pleasure to visit Malmsbury’s Botanic Gardens, not too far from Bendigo. It wasnt hard to imagine I was living in rural England. Living in places like this would be a joy.

  7. A sensible policy to transfer the heat from Vic auctions to new home sales would be to remove the FHB grant from existing dwelling sales immediately.

  8. How predictable was this! People stop buying over-priced, poorly built, tiny-plot houses in the middle of bl..dy nowhere once the con about ‘missing out’ and ‘prices up forever’ is outed.

    As the guys here keep saying – tie this in with the end of the mining boom / terms of trade collapse and it’s going to get interesting.

    (and just because i can – i’d also like to draw attention to what the morons that have managed to climb to the top of the corrupt party system are bickering about while all this unfolds)

    • Ironically, the advocates of growth-constraint planning point to the collapse of sand suburbs as vindication of their theories, when in fact the sand suburbs would not exist if young people were not priced right out of the existing metro area.

      The distortion in prices is all in “land”; this means that the once-traditional option for first home buyers, the “fixer-upper” home in older suburbs, is now priced way out of their reach. Even if the old ramshackle dwelling is worth basically nothing, the piece of dirt it sits on in an older suburb, now costs more than a whole new land-and-McMansion package on the fringe.

      This can easily be illustrated by plotting two curves on a graph: price of section by location, price of structure by age and condition, and the resulting total price of the home. Watch what happens to “location choices” when you inflate the land cost input tenfold, twenty-fold, and more.

      • The fact is people are not buying these places for the right reason – there was a frenzy of speculation whipped up by cheap credit and poor policy that had two outcomes:

        1. Old suburbs were soaked up by investors and speculators;
        2. Boon-dock suburbs were over-exploited by creating a perception of scarcity that only existed because the credit conditions allowed it.

        As i’ve conceded – some land use improvement (both boon-dock and inner) is fine and appropriate, but you are railing at the symptoms if you think you can out supply the speculators.

        Get rid of the foreign and domestic speculators/investors and you don’t have a housing shortage.

        • Easy credit and other dumb policies (e.g. negative gearing) are a part of the problem, but supply-side reform is needed to extinguish speculative demand whenever it arises for whatever reason. There is a reason why around half the markets in the US remained affordable and prices stable in the face of some of the easiest credit the world has ever seen, not to mention tax deductable owner-occupied mortgages.

          • Fair enough EU – but there does seem to be an over-representation of the desert states in this pool (not the hot coastal stuff)and also this did not seem to stop the US from still turning all their regions to useless unwanted housing sprawl.

          • Growth constraints in coastal areas create a different kind of sprawl – i.e. leapfrog development to the interior. A classic example of this is the San Francisco Bay Area’s tight growth boundary, which pushed lower-middle income earners 80 miles inward to the Central Valley, forcing these poor sods to then commute back and forth to/from the Bay Area for work. A similar situation has developed in Australia.

          • AJ, speculation and rent-seeking in urban land markets is actually the historical norm that has ONLY ever been beaten by automobile based development and elastic supply of housing. Histories of urban land market price volatility note that this was a norm up till WW2, then there was several decades of unprecedented price stability everywhere except the UK, where they never really allowed automobile based development and competitive land supply for urban development.

            This pre-automobile price volatility norm has been restored by returning urban land markets to pre-automobile-based-development conditions of anti-competitive land supply. No-one has field-tested and proven regulatory and taxation frameworks that allow for constrained supply AND keep land prices low and stable. Japan tried absurdly high CGT’s. The Netherlands government compulsorily purchases land for development. Some US States have “land taxes”, but those that had “smart growth” still had house price bubbles. South Korea has always had absurdly strict limits on mortgage credit. None of this stuff has stopped urban land prices going crazy and the whole economy being rendered volatile thereby.

            I even say the great depression of the 1930’s was made far more severe by the urban land price bubbles that occurred at the time, and that share market crashes have been a tragic diversion of academic attention.

          • I don’t think we are as far from consensus as you think PB. The point I’m happy to concede (and recognise I’ve evolved on) is the level of high urbanisation. This urban land coverage is actually very low as you have pointed out and can be easily extended. however the levels of human impacted land are staggeringly high and a global disgrace.

            I’d like to see large tracts of space with significant ecological, environmental and amenity value kept off limits close to cities/ocean etc, but in return I’d be fine with the areas available for development freed up massively. I’d like to see restrictions on min block size – but I guess your view is that this would sort itself out.

            Add the anti-speculator rules to this and we would improve the amenity and the utility of the land.

            The Gold Coast coastal sprawl is an immense loss to future generations – it is a human concoction of gut-wrenching ugliness.

  9. I’m invested in property as most of us are (either home or IP), but I’d prefer it if house prices came down some, in as a controlled manner as possible.

    I’d rather my kids can afford their own home, paid from their own work, rather than waiting for me to dies so they can get their hands on my overpriced property. Also I’d prefer if they actually have a job and not live in an economy destroyed by a massive asset bubble. And I have zero desire to “use my house as an ATM”, nor do I think more debt ever solved anything.

    • +1 I reckon most Australians now realise that Sydney disease is a ‘disease’ – as a society we lose when residential housing is treated as a speculative finance asset.

      The politicians will only care when the the public starts voting out the idiots that support the current policies

  10. If Melbourne’s construction industry is in dire straits I think we aint seen nothing yet Leith. I’ve been looking to make a few improvements to my place over the last month and I’m still being fobbed off by tilers and sparkies. The lure of Snapper in the bay must still outweigh small cash jobs by the look of it.

    • The bay must be illumunated by hiviz vests.
      According to Leiths numbers above there are 40,000 construction workers no longer occupied in Victorian jobs YoY.

      Apart from WA/NT I don’t know where else they are going. Not much happening up here in Qld

      • If the NZ government got some nous and some cojones, these workers would be in Christchurch already. The urban planning religion is wrecking even the rebuild of ChCh; we might as well have not had an “enlightenment” and might as well still have the medieval papal theocracy in charge of everything,they would be less of an obstruction to progress than the enviro Taleban.

  11. When will these developers give in and cop their inevitable margin calls?

    New land in Melb is relatively cheap compared to Sydney. They’re talking $200k av in Melb, but on ever smaller plots.

    In Syd you’d be lucky to see anything advertised lower than $300k… with the same ever shrinking plot size…

    If the bust is so evident in Melb, then lets have Chris Vedelego’s Sydney opposite number expose the state of Sydney’s land sales!

  12. I’ve noticed that posters often reference Texas Real Estate urban planning practices for keeping down the cost of homes in the lone star state. However what is missing from this analysis is the way in which businesses co-locate with their employees.

    With reference to say Dallas the geographic middle of the urban sprawl is about 10km north of the City center. It is a fairly nasty commute from the northern fringes (Plano , Allan etc) to downtown Dallas, so most of the employees living in Plano work somewhere north of the northern Ring road (aka 635)

    This co-location occurs because these businesses are also sensitive to their RE costs. The manufactures in the region can easily acquire land to expand / relocate their businesses so they do.

    Another point worth mentioning is that “Busing” is still a hot button Dallas issue. (Busing is a 60’s affirmative action plan to take poor Black / Hispanic kids from South and East Dallas and give slots at North Dallas Schools). Busing rules to not require Plano to take poor South Dallas kids, so you got a law of unintended consequences effect whereby moving to these newer regions lets families escape the downside of Busing.

    My point is there are a lot of reasons for the Dallas residents preference for the new areas and this preference is what really helps constrain prices

    • Your observations are good, but do you not see this as a good model to emulate? 200 out of 260 cities in the USA, that are covered by the annual Demographia reports, have never had unaffordable housing. Study after study is now confirming that the cities with affordable housing also have lower average trip to work times even though they have lower density and much larger space per household.

      This is because of the effect you describe, that employment decentralises roughly as fast as housing does – if you let it.

      The ten thousand dollar question for advocates of urban planning, is, why wouldn’t you? Why create “solutions” for problems that do not exist anyway if you just let the market work? Hayek has been proved right again and again about the “unintended consequences” of “planning”. Urban planning is no exception, it is merely the latest chapter in a long history book that is still being written.

      There are really only three things that matter for efficiency of urban travel: 1) dispersion of employment and other trip-destination amenities (and “balance” between these things and housing)
      2) affordability of housing everywhere, including the affordability of location near to jobs or favoured trip destinations (including schools) – the lower and flatter the urban land rent curve, the better
      3) road capacity.

      Contemporary urban planning fads score a massive “fail” on all three counts. This is why every city in the UK, after 60 years of “smart growth” by whatever name, scores high on “density”, “centralisation”, and “public transport use”; yet they have world’s-worst congestion and trip to work times, world’s-worst housing unaffordability, the lowest economic productivity among first-tier nations, worst local pollution among first-tier nations, and the worst social exclusion among first-tier nations, the effect of income disparities being “multiplied” by the “rationing” of every amenity of housing by price. See my comments elsewhere on this thread.

  13. Some estates have had builder pricing indicating something very close to a cartel, so I am not surprised at all if small deposit buyers or anyone paying attention to the world is bailing out after discovering the total cost of the project.

    • Pricing that is stubbornly unresponsive to falling demand over a long period of time is indicitative of a lack of competiton at best; at worst it establishes a prima facie case of collusion and price-fixing.