Land plan to cut house prices
Peter Kerr, The West
Australian Updated April 9, 2013, 2:40
am
New Housing Minister Bill Marmion wants to drive down house prices by
flooding the market with land to improve affordability for those struggling to
get a foothold in property.
In a renewal of his controversial comments in 2010, Mr Marmion told The West Australian that releasing more land was one of the key ways to ensure cheaper houses.
His intervention into the debate about the cost of homes in WA comes less than a week after figures revealed Perth’s median house price surged to a record $510,000 in the March quarter and rents continued to soar.
“Opposition Leader Mark McGowan laughed at me in Parliament (in 2010) when I said you have got to try and flood the market with more land … to drop the cost,” Mr Marmion said.
“But that is the only solution — to have land ready to go (to build on).”
Mr Marmion found a strong ally yesterday in the developers’ lobby group, the Urban Development Institute of Australia.
It warned that Perth had less than two months supply of land that was ready to build on.
UDIA chief executive Debra Goostrey said the turnaround in the housing market in the past few months had caught the industry by surprise.
She called on the WA Government to reduce red tape and up-front costs for developers to avert a looming squeeze.
“When you unpeel the emotive language on flooding and say you need adequate and orderly land supply, I couldn’t agree with him (Mr Marmion) more,” Ms Goostrey said.
“It is fundamental to affordable housing.”
But the Real Estate Institute of WA, which has in the past been worried about big land releases triggering negative equity — houses worth less than their purchase price — said Mr Marmion’s comments were misplaced, especially given low interest rates.
“Housing affordability has actually improved to its best level in a decade,” REIWA executive manager of policy and research Stewart Darby said.
“In Perth, the supply would be miniscule in the context of the total housing stock and would make no difference to the overall composition of the median house price until dwellings are built on that land and then sold.
“And all that would do is devalue existing properties in those neighbourhoods.”
Mr Marmion pointed to State-owned LandCorp’s land releases in Broome last decade as proof the policy could help moderate prices, which he said was crucial — along with other measures such as shared equity schemes — to help tackle WA’s big social housing waiting list.
“If you have a supply of land for people to buy and put a house on you can try and keep the prices down,” he said.
“We have got an absolute problem in terms of affordability at the lower end.
“It is a major problem for me as the Minister for Housing running a social housing stock.
In a renewal of his controversial comments in 2010, Mr Marmion told The West Australian that releasing more land was one of the key ways to ensure cheaper houses.
His intervention into the debate about the cost of homes in WA comes less than a week after figures revealed Perth’s median house price surged to a record $510,000 in the March quarter and rents continued to soar.
“Opposition Leader Mark McGowan laughed at me in Parliament (in 2010) when I said you have got to try and flood the market with more land … to drop the cost,” Mr Marmion said.
“But that is the only solution — to have land ready to go (to build on).”
Mr Marmion found a strong ally yesterday in the developers’ lobby group, the Urban Development Institute of Australia.
It warned that Perth had less than two months supply of land that was ready to build on.
UDIA chief executive Debra Goostrey said the turnaround in the housing market in the past few months had caught the industry by surprise.
She called on the WA Government to reduce red tape and up-front costs for developers to avert a looming squeeze.
“When you unpeel the emotive language on flooding and say you need adequate and orderly land supply, I couldn’t agree with him (Mr Marmion) more,” Ms Goostrey said.
“It is fundamental to affordable housing.”
But the Real Estate Institute of WA, which has in the past been worried about big land releases triggering negative equity — houses worth less than their purchase price — said Mr Marmion’s comments were misplaced, especially given low interest rates.
“Housing affordability has actually improved to its best level in a decade,” REIWA executive manager of policy and research Stewart Darby said.
“In Perth, the supply would be miniscule in the context of the total housing stock and would make no difference to the overall composition of the median house price until dwellings are built on that land and then sold.
“And all that would do is devalue existing properties in those neighbourhoods.”
Mr Marmion pointed to State-owned LandCorp’s land releases in Broome last decade as proof the policy could help moderate prices, which he said was crucial — along with other measures such as shared equity schemes — to help tackle WA’s big social housing waiting list.
“If you have a supply of land for people to buy and put a house on you can try and keep the prices down,” he said.
“We have got an absolute problem in terms of affordability at the lower end.
“It is a major problem for me as the Minister for Housing running a social housing stock.
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