Freeing up Speculative Land
ALP policy will continue to subsidise developers over first home owners. The ALP’s new housing minister should look at freeing up the supply of privately held land (aka land banks) by using a Site Rental on all land.
In response to the housing industry’s recent call for the freeing up of land, Prosper Australia’s Karl Fitzgerald said “The only thing free about the ALP’s housing policies is the subsidy it will give land bankers.”
The recent I Want to Live Here report found that there was a substantial supply of land currently being wasted by speculators within the inner city, in Bluestone ward, Maribyrnong.
“In a period where we are constantly reminded of record low vacancies, the release to the market of speculative vacancies would see an extra 1058 people living in just one small community” reported Mr Fitzgerald.
430 properties were found vacant in Bluestone Ward, 93% of which were vacant blocks of land. Taken at current auction rates, this would double the supply of auctionable properties in the area for one year.
“With land prices having increased at 4 times the rate of GDP and dwarfed wages growth since WW2, it is time the ALP had a hard look at the economic fundamentals that sap any gain union wage demands deliver.”
“The ALP must be cautioned. All of its policies will continue to subsidise property developers. Infrastructure funding makes property more valuable. Savings deductions give buyers greater purchasing power, again inflating land values. Rental subsidy schemes may assist in the short run, but in time will simply see higher prices charged to the rest of the market.”
“The biggest furphy of all is that a Commonwealth land release will assist affordability. What is to stop speculators from purchasing the land and holding out until the market meets their blackmail price?” said Mr Fitzgerald.
“With climate change threatening, unlimited urban sprawl cannot be encouraged. Existing public transport corridors must be improved. However, speculators almost always outbid first home buyers near transport hubs due to the tax benefits they receive.”
The best and most effective way to remedy this situation is to ensure there is a holding charge on all land, in the form of a Site Rental. Then speculative vacancies will be discouraged. The resultant inner city land supply added to the market will put downward pressure on the market, encouraging a level playing field between buyers and sellers.