I have explained previously (here, here and here) how the ACT Government deliberately manipulates urban land supply in order to maintain exorbitant land/house prices.
Despite having an abundance of developable land, the Government has for a long-time drip-fed supply to the market, maintaining an artificial land shortage (scarcity) and, in the process, forcing buyers to pay high prices.
According to Australian Property Monitors, the median Canberra house cost a whopping $573,000 as at September 2014, with the median house rent a ludicrous $450 – ludicrous because the ACT is effectively a large town with abundant vacant land in and around the “city”.
Indeed, a 2011 report from the ACT Auditor General found Canberra’s land supply policies to be lacking, resulting in a structural undersupply of land made available for development and deteriorating housing affordability:
…the land supply and release process and programs to date have not been effective in achieving the Government’s stated objectives, which include meeting demand, providing affordable land and housing and establishing an inventory of serviced land….
ACT Government agencies have not used a robust model in identifying residential dwelling demand…
Agencies have consistently under-estimated the apparent demand for residential dwellings within the ACT, and ACT Government land release targets have been significantly and frequently revised upwards in recent years. Despite the current accelerated land programs, there was evidence of a shortage of the supply of residential land, capable of being built on, to meet the pent-up and on-going strong demand.
In 2010, at the height of the last housing boom, the ACT Government’s supply restrictions even led to buyers camping out for up to one week in freezing conditions in order to secure a lot.
And to prove the point that land supply is being restricted, a search on the Land Development Agency’s website for available lots yields the following result:
Says it all really.Despite being one of the least densely populated cities in Australia, there are no residential lots available to buy!
All of which makes one wonder why the ACT Government has written a submission to the Defence white paper requesting that the Defence Department not release large swathes of land for development, fearing that it would lower ACT land prices. From The Canberra Times:
The ACT Government has asked the federal government not to send the Canberra property market into disarray by pushing masses of surplus Defence Department properties onto the market…
“If Defence were to rationalise its land and to release land…directly onto the ACT market, this could have a long‐term impact on urban planning, land sales and future development sequencing in the ACT and surrounding region,” the territory government’s submission said.
“The sale of any surplus defence force lands should take place in the context of territory planning strategies and be cognisant of the commercial and residential markets in which it is being sold.
“Any ad‐hoc surplus land release could impact on future residential developments in the ACT and future commercial developments such as the eastern broadacre employment corridor”…
“Future developments in surrounding ACT region could also be impacted, in particular Queanbeyan and Bungendore,” the submission said.
Of course, the sub-text to the ACT Government’s submission is that it wants to maintain its planning stranglehold that keeps land/house prices artificially high, to the detriment of younger Canberrans and those locked-out of home ownership and stuck paying inflated rents.
Funny how state and territory governments never show as much urgency to lift land supply when prices are escalating as they do to slow land release at the first sign of weakness.
