Swing that Cat!


New Sydney flats will have to be bigger, the NSW Land and Environment Court ruled last week, overturning long accepted common practice allowing minimum one-bedroom unit sizes at 50m2.

Dual-aspect flats must be a minimum 58m2 and more common single-aspect flats 73.4m2.

Property observers have been watching the steady shrinking of high rise flats with some alarm. This isn’t about dizzy planners imposing costs on struggling homebuyers, this is about permanent additions to our housing stock and how useful they are.

High rise reinforced concrete buildings are very hard if not impossible to change.

The one bedroom flats are mostly being sold to investors who have no intention of living in them. They are the developers’ customers, not the occupants.

In theory, two cramped flats could be amalgamated to make a single spacious one. Sadly the numbers go against this. Putting two $350,000 flats into one worth $600,000 makes no financial sense. The next buyer will simply reverse this and pocket the sacrifice. This is why minimum standards are so important.

Meanwhile, the AVERAGE size of a new one bedroom flat in Melbourne has fallen to 44m2 and two bedders to 59m2. Smaller flats aren’t cheaper – the savings are simply capitalised into higher land prices on all future developments.

There were moves last year to establish minimum standards in Melbourne, with former L/NP Planning Minister Matthew Guy making encouraging noises, however implausably, but vanished with the election of the Andrews ALP government.

There is a democracy lesson in all this. If the bureaucracy can’t act and the parliament won’t, the judiciary must – which is why the NSW Land and Environment Court ruled on minimum flat sizes.

1 Comment

  1. benj17-04-2015

    Excellent stuff and exactly the sort of thing we should all cheer. That Court deserves plaudits.

    William Vickery noted that building regulations, like property tax, merely lowers selling prices. That is, the cost falls squarely on land.

    In the UK under Margaret Thatcher, we scrapped minimum size standards. The results? The cost savings from poorer regulations were immediately capitalised into higher land prices.

    We could in theory increase the cost of building new homes three fold, and aggregate house prices would not rise one penny.

    Building small, poor quality housing saddles future generations to miserable living standards. The only beneficiaries being present landowners.

    It’s a disgrace which due to ignorance regarding basic economics is allowed carry on.

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