Canberra’s current housing crisis is complex, caused by a perfect storm of factors such as the long-term constriction of land supply for detached houses, halted migration, historically low interest rates and Federal-level tax incentives.
But rather than sitting on their hands and blaming Federal policies, the ACT Labor Greens Government can and should take action using the lever actually within its control: the supply of land.
The ACT has seen record growth in house prices in the last year and plunging levels of affordability, particularly for detached housing. According to the September 2021 Domain House Price Report, the median house price in Canberra is $1,074,187 (up 32.4% for the year) and the median unit price is $489,710 (down 2.6% for the year).
Consider these facts:
- The ratio of median house to median unit prices in Canberra is the highest in the country
- House prices are growing much faster than unit prices in Canberra in this current boom
- Over 7,000 people registered for a recent ballot of 115 blocks in Taylor.
This suggests that there is a gross mismatch between the preferences of Canberrans and the type of housing available.
The ACT Labor Greens government has limited the supply of new detached houses for a decade now. And their latest policy is that 70 per cent of all new housing must be within Canberra’s existing footprint. There is precious little detail on how this will be achieved. Until the government explains otherwise, the assumption is that most of that will be met by apartment towers, multi-unit developments in the suburbs, and loss of current open spaces.
And it is easy to see that the Labor Greens government recognise the mess they have on their hands because their land supply reporting only refers to ’dwellings,’ never transparently reporting on land for different types of housing, such as houses, townhouses and units. These are all referred to collectively as dwellings. This is a blatant attempt to cover-up the inadequate supply of land for detached housing that we know Canberrans actually want the most, because the demand for it is soaring.
To make matters worse, the Labor Greens government never actually delivers the number of blocks of land for detached housing it promises each year in the budget. This failure to deliver further exacerbates the housing crisis.
The demand for the detached housing blocks in the Taylor ballot shows there are a significant number of Canberrans who would like to live in a detached house, or a similar substitute. The government’s own Winton report from 2015 showed that Canberrans overwhelmingly wanted their next dwelling to be a detached home.
There is of course a market for a range of other dwelling types, as Canberrans move through different life phases and their housing preferences change. But we clearly do not have the balance right.
Governing is about taking responsibility and being effective stewards of the community. Where are the solutions to the housing crisis?
Before closing I will pose two questions. How many of the Greens MLAs live in detached housing? How many Labor MLAs live in detached housing? This government, in another time and in another place, might be overheard to say “let them eat cake.”
The ACT Labor-Greens Government should stop blaming factors over which they have no influence, and respect the community’s preferences as they manage the factors they do control: land supply and a broader range of housing choices.
- Peter Cain, Canberra Liberals MLA for Ginninderra
Editor’s note: The opinions expressed in this column are those of the author and do not necessarily reflect those of Canberra Daily.
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