A glut of building land in the ACT has caused the ACT Government to tighten supply by delaying some of its greenfields joint ventures.
The move was welcomed by the Master Builders Association yesterday but criticised by the Opposition, an Independent and an umbrella community group as evidence that the Government’s in-fill program has been unnecessary.
The Minister for Environment, Land and Planning, Bill Wood, said two greenfields developments involving about 800 blocks would be postponed for five months.
He said the increase in interest rates, lower population migration into the ACT and a large jump in completed but unoccupied houses required steps to reduce the amount of land coming on to the market.
The assistant secretary (land-development branch) in the Department of Environment Land and Planning, Hans Somer, said earlier predictions that the ACT could expect population growth of about 1.8 per cent for the next 15 years would not be met. A decrease in migration from other states meant the growth would fall to about 1.2 per cent.
Industry and government bodies were suggesting that the migration fall was because the ACT was comparatively less attractive as other states came out of recession, so fewer people were moving here.
Mr Somer said the Government wanted to adjust land supply to balance affordability with a reasonable return on the investment in preparing land.
It wanted an equilibrium between supply and demand because a land glut would affect prices of existing dwellings and affect the rent market and vacancy rates.
The Federal Indicative Planning Council had predicted 3200 dwelling commencements for 1993-94, coming off a high of 4073 in 1992-93. Next year it might be less than 1993-94. In that environment, there would have been too much land coming on stream.
Opposition planning spokesman Greg Cornwell said the residential building industry had been badly misled by planning projections.
The Government had been too keen to maximise revenue from land sales and stamp duty and had allowed development to go unchecked. It would now have to take responsibility for any downturn.
Independent Michael Moore said the glut proved there was no need for the urban renewal program. The claim by the Master Builders Association and the Housing Industry Association that a moratorium on development pending the Landsdown (subs: correct) inquiry would cost $150 million was now disproved.
Jacqui Rees, the president of the Canberra Conservation Council which drew together the Save Our City Coalition, said Mr Wood’s move to slow greenfields development had pulled the plug on the 50-50 greenfields-renewal policy.
“”The trouble is he has pulled the wrong plug,” she said. “”He should have stopped the in-fill/dual occupancy side.”
It was economically and environmentally irresponsible to allow redevelopment of usable housing when there was no shortage of land. It was also environmentally and socially irresponsible to allow the continued despoliation of existing suburbs.
“”We have been warning of this for more than a year, and all we have got is abuse from Bill Wood,” she said.
Urban renewal should be stopped until the long-term strategy inquiry was completed.
She understood that 73 per cent of vacancies were in medium-density dwellings; “”Proving he has pulled the wrong plug.”
“”He should stop toadying to the MBA and get some decent advice.”
The MBA issued figures yesterday which it said backed the case for a slow-down. It said there were 6300 greenfields blocks with developers and builders and 2000 redevelopment dwellings in the pipeline. A further 3150 blocks were proposed to be released in 1994-95 in government and joint venture projects.
The executive director of the ACT branch of the MBA, Bernie Bryant, said the industry needed about 4500 dwellings in the pipeline.
He welcomed the Government’s decision to delay the 800 blocks saying it would avoid adverse effects on builders holding land stocks and “”not erode the underlying value of the prime asset of ordinary Canberrans”.
The delayed joint ventures are Dunlop 4 and Bruce. Originally no construction or sales could take place till October 95; that has been put back to March 1996.
These were among four joint ventures that the Government call for expressions of interest last month. The other two were about 400 blocks in South Tuggeranong (not to be delayed) and 630 blocks in Dunlop 3 where only the first 60 blocks would be allowed to be sold before March 1996.