If ever we needed any more motivation to burn the midnight oil, the Brumby government’s latest handout to the property lobby is just this. Just nine months since he handed out free lunch with the 90,000 blocks of zoned land announced in March, Brumby has now extended the 2030 boundary to accommodate 134,000 new homes.
Royce Millar was using the right language when he said:
BIG-NAME property speculators were celebrating yesterday, with the proposed stretching of Melbourne’s city limits set to deliver windfalls of many millions to some of Australia’s largest developers.
Will people put 2 and 2 together to realise that these windfall gains could help fund the abolition of regressive taxes like the GST? Do they realise there are more effective ways to push down the price of land?
Why did Brumby roll out the picnic blanket? Because the property lobby asked for it. What the property lobby asks for, the property lobby gets. The backbone to the release was a growing cascade of property reports showing that housing construction is falling behind population growth. But as our friends at bubblepedia have so eloquently shown by analysing Census figures, construction has outpaced dwelling growth by 4% (scroll to bottom of link).
Land supply is not the solution or the 90,000 land blocks released in March would have made a difference to Victorian land prices.
Land banking is the problem. Speculative hoarding of prime locations is the advantage land speculators have over other small businessmen. A higher Land Tax or Site Rental would discourage such activity and ensure the community gets a share of re-zoning windfalls over the long run, rather than hitting current first home buyers once off with a $95,000 development fee per hectare. Developers will laugh this off by passing on the $4,750 per site to buyers.
A new report by Tohm Curtis will soon expose the need for greater utility of land and housing for housing – not speculative hoarding. The inner city has thousands of vacant abodes and blocks of land that should be used before more greenfields are ripped up.
One day young people are going to realise how badly they are getting ripped off.