The ACT government pricing the land it releases properly is arguably more important than the release of the land itself.
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If the land is priced too high, the land will not sell.
And if it does not sell, a house cannot be built on it to house Canberrans and help address the housing crisis.
It was reported this week that the ACT government was doubling its land release for the upcoming year. This has to be matched by pricing properties so they actually sell.
There are currently 212 single residential land lots for sale in Jacka and Whitlam on the Suburban Land Agency website - 107 in Jacka and 105 in Whitlam. Note in April 2024, the numbers were 110 and 109 respectively - land lots are not exactly flying out the door.
These Jacka land lots average 487 square metres (sqm) in size with an average price of $639,000.
The Whitlam land lots for sale average 476 sqm in size with an average price of $689,000.
As context for this pricing, these Whitlam and Jacka land lots are selling for $1300 to $1500 per sqm - old houses in O'Connor are selling at just over $1500 per sqm.
Land is arguably not selling because it is too expensive.
The decision to build is a function of both land and construction price.
![ACT Housing Minister Yvette Berry. Picture by Karleen Minney ACT Housing Minister Yvette Berry. Picture by Karleen Minney](/images/transform/v1/crop/frm/231012065/6b2c431a-1321-447b-b50b-57e038d9801e.jpg/r0_422_8256_5082_w1200_h678_fmax.jpg)
If the government wants more homes, it needs to drop the price of land.
(The issue compounding the lack of land sales is building costs inflated due to excessive ACT government regulation and slowing planning approval times).
Why won't the ACT government drop the price of land?
Land can only be sold once.
So the government has an incentive to maximise returns from the sale of this scarce asset - and land is pretty much the only set of assets they have to sell.
This incentive to maximise revenue is made stronger by the state of the ACT budget.
We will get an update in Tuesday's budget but at the midyear update we had ACT government borrowings projected to be well on their way to $20 billion and an annual deficit heading towards $1 billion.
At just under 200,000 households in Canberra, that is borrowings per household of close to $100,000 and annual shortfall in the budget of almost $5000 per household.
The state of the ACT budget, in an environment where households and businesses are already very highly taxed, means the government arguably cannot afford to drop the price of land to get houses built.
So in the simplest of terms it comes down to this - is it more important to house Canberrans or maximise land sales revenue on each individual block of land?
Why not auction the land progressively to meet the market but without flooding it?
It will get land into the hands of new owners and builders and in a very short time have more people housed.
If high building costs are holding people back from buying still, then "give" the land to Housing ACT or community housing providers and get more housing built that way.
The housing "crisis" is arguably not being treated as a crisis by the ACT government politicians and bureaucrats due to the lack or haste and urgency with which they are acting to address it. Addressing homelessness has to be about more than promises and CEO sleep-outs. I imagine those in Canberra who are homeless, under threat of homelessness and under severe rental stress would simply like to see more housing.
- Dan Carton is the former chair of Havelock Housing and the former chief economist of Defence Housing Australia.