Home' API Magazine : October 2014 Contents OCTOBER 2014 n APIMAGAZINE.COM.AU n 103
he Australian Capital Territory’s
property market is driven by its biggest
employment base – the public service.
Changes in government or cuts to
spending have an immediate flow-on to the
local economy and to real estate. Another
anomaly is that no one technically owns their
nPLEASE RELEASE ME
Government, rather than freehold owners,
release land for residential development in
the ACT. The Land Development Agency
(LDA) controls supply. Each year they prepare
a four-year indicative land release program
for residential, commercial and other land
uses. The program is designed to be flexible so
government can respond to demand levels in
the market, as well as changing priorities.
David James, a partner at Herron Todd
White, says as well as a control mechanism,
the LDA works as a developer generating
revenue for the local government. He says
if you’re in the market for new product,
it’s worth checking out the latest report at
“It’ll take you through what the population
is and a few of the macros. It also lists all the
districts and how many dwellings they’re
planning to put to the market over the next
The government’s map of major releases for
2014/15 reveals large lot numbers planned
for the suburbs of Taylor, Moncrieff, Denman
Prospect, Phillip and Greenway.
James says there are also moves afoot to
develop the fringes.
“They’re pushing out even further now to
Bonner, Casey, Jacka.
“The other one is Molonglo which is on
the western side of Canberra... it’s where all
the fires came through back in 2003... There’s
going to be another town centre called the
James says most of the developing areas are
well serviced with schools, shopping and other
facilities, but there’s a desire to decentralise
government agencies too.
“Getting large government departments to
go out there, whoever they might be, would
save on transport costs for a lot of people.”
Ron Bell, the chief executive officer of the
Real Estate Institute of the ACT, isn’t a fan of
land releases by the powers that be. He says
they sell land to builders and consumers off-
the-plan by accepting deposits, and then take
up to two years to get services in place.
“The government still puts a lot of pressure
on getting sales to the (building) industry
without those services being in place, and the
net effect is that house-and-land packages in
the newer suburbs are simply not available in
any great number.
“Builders can’t build on the product until
all the services are in.”
“I think the territory is probably one of the
only places in Australia that does that and
they’ve been able to get away with it. I think
it’s wrong quite frankly.”
“At the moment, the established market...
for dwellings would be a third down in sales
volume on this time last year. There’s probably
only about 2200 homes on the market where
there should be 3000 plus.
“On the other side of it, we’ve got more
than 4000 apartments, townhouses and villas
available for rent, (and for sale) to investors.
While the vacancy rate is around the four per
cent mark, that’s far too many on the market,
and more to come.”
IN WITH THE NEW
It’s one of Australia’s ‘unique’ markets with controlled
land releases and no freehold. So how is new product
faring in the ACT? KIERAN CLAIR [@kieranclair]
nWHO’S THE BOSS?
Another consideration that’s confusing for
out-of-towners is the titling system in the
ACT where you don’t actually own the land
you buy, because it’s under Crown Lease.
“The government owns the land but you take
a 99-year lease over the property,” James says.
He says the lease is automatically renewed,
so buyer’s rights are secure.
“Essentially where you have freehold
everywhere else (in Australia), this is a
leasehold system but for all intents and
purposes... you have ownership in perpetuity.”
James says the new home market has seen a
clear trend towards smaller home sites.
“So really, between 250 to 300 square metres
up to 400, 450, 500 square metres and then
there will be some larger ones again at 600
to 800 square metres, so they provide a fairly
He says you find mostly three and four-
bedroom homes with and without ensuites.
For price points, James says buyers in a
suburb like Casey to the north will pick up a
three-bedroom house in the low $400,000s,
with four-bedroom, ensuite and double garage
abodes fetching between $500,000
James believes the government must ensure it’s
taking a balanced approach to supply when it’s
releasing new residential allotments onto
“They (the government) have got release
sites ready so they can just put stock out to
the market. This isn’t always a good thing
because people need capital growth as well...
If demand isn’t there to even things out,
you’re going to have major supply and the
capital growth isn’t quite there.”
James says he considers the market to be
subdued at present because demand is soft
due to Federal Budget announcements that
flagged thousands of public service job cuts
in Canberra. His long-term view is, however,
“There are still sales occurring. It’s probably
just at the bottom of the market for vendors
and landlords. We know markets turn and
I’m sure it will turn again.” API
Australian Capital Territory n THE STATES
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