Labor MLA David Lamont has called for an end to what he called “vertical control” of ACT housing development.
He described it as “the situation where land developers have total control of building and land sales on their development sites”.
Mr Lamont said it “is uncompetitive and is artificially inflating the price of new homes in the ACT”.
Land developer Alex Brinkmeyer, who heads the Land and National Development Company and Realty World, said Mr Lamont was correct that in the past there had been land development companies which sold largely or solely to their own builders. However, now that there was plenty of land available, this was no longer the case.
He said his company sold to independent builders and members of the public on a first-come-first-served basis.
Mr Brinkmeyer’s development company has about a third of the broadacre market.
Another developer, Bob Winnel, said he could not see how Mr Lamont’s comments applied to his company. Mr Winnel runs MBA Land which also has about a third of the broadacre development.
Forty per cent of the land he developed went to his builders, 40 per cent to untied builders and 20 per cent to the public. He would sell more to the public if the demand was there.
Mr Lamont, chair of the Legislative Assembly’s Planning Infrastructure and Development Committee, said it was outrageous for some land developers and real estate interests to criticise the committee’s proposals for new energy-efficiency ratings for new houses when their own cost structures were uncompetitive.
Mr Lamont drew support from Mr Brinkmeyer on energy.
“Too many houses in Canberra are being built without proper insulation, slab floors and solar orientation,” he said.
“Young people should stay at home a bit longer, save a bit more and buy houses of better quality.”
But the Government had to make its changes gradually and in consultation with the industry. He welcomed more joint ventures because the Government would understand market conditions and the industry better, but said the Government should not revert to a monopoly in land development because it would get it wrong.
Mr Lamont said there was an urgent need to get more choice and competition back into the retail end of house purchasing.
He cited last year’s Prices Surveillance Authority report which said the ACT had among the highest real estate agency fees in the country.
Mr Lamont said he was taking the long-term view about “setting the procedures and guidelines to develop and maintain the essential characteristics of the city”.
He was concerned that development integrate with the social structures of the city, and that perhaps the present method of land development needed to be changed to achieve that.
He believed the Government should control development in sensitive areas like Holder-Duffy and North Canberra and that there should be more joint ventures elsewhere.
Mr Winnel and Mr Brinkmeyer said there were at least half a dozen developers selling land and house-land packages at present, all competing for price.
Mr Brinkmeyer said the 160 small builders and 280 agents working with his companies were all competing with each other for price and quality to get sales. Prices had come down recently.
Mr Winnel said he was sick of having to defend his company. No-one questioned that there were only three television stations or one newspaper in the city when that was all the market would bear.
The ACT Government was being hypocritical when it called for greater competition in land development, yet would not permit it in health services because it prohibited a new private hospital, he said.must.. The ACT Minister for Environment, Land and Planning, Bill Wood, announced last year, and repeated on several occasions, that land development should revert back to the Government, starting with more joint ventures.
He has said he wants to see a return to Albert Hall public auctions for single blocks of land.