Expensive land is changing the shape of Australia.
The Melbourne versus Sydney rivalry has been reignited – Melbourne’s population is growing faster and is projected to overtake Sydney by 2037, a new report predicts.
Going Nowhere, a report by BIS Shrapnel for a property developer lobby group, shows Melbourne building new homes at twice the rate of Sydney.
Suddenly the ancient divide matters. The largest city becomes the country’s commercial centre, attracting head offices, high-level professionals and wealth.
This is a prize Melbourne craves – to again be the ‘Marvellous Melbourne’ it was in the Victorian goldrush.
Melbourne is winning this race because Sydney has stumbled on land costs – too many families are locked out of the housing market and are making their nests elsewhere.
Who can blame them. Couples buying in Sydney at the moment will sacrifice their lives to a mortgage.
The developers’ lobby Urban Taskforce blames state levies on residential subdivision for boosting the cost of land.
They would, wouldn’t they.
Urban Taskforce is playing the old, old game of cost shifting.
Developer levies are an attempt to meet the staggering cost of building schools, transport links and other services in new urban areas.
Levies are a second or third best option. They are capitalized into land prices and developers add an extra profit margin for having to pay them.
It doesn’t have to be like this.
Levies are a poor, distorting substitute for Land Tax.
Land tax is light where values are low, in the outer suburbs where service provision is overwhelmed by distance and rapid change. Land tax is higher where the high quality government services provided in established residential areas boost land prices.
Land tax makes land cheaper. It gives landowners a powerful incentive to put land to its best and highest use, increasing supply. It removes brakes on the transfer of land like stamp duty.
Land tax would transform the lives of all those citizens locked out by high prices and denied independence, freedom and autonomy.
We see ourselves as a land-owning democracy. Land tax would make this truly so.