Governing the City State - Chief Minister and Treasury Directorate ...

Historically, the ACT has enjoyed the nation’s best housing affordability. This situation isreflected in the most recent statistics gathered by the Real Estate Institute of Australia whichindicate that, while the national average required to meet mortgage repayments is around35% of household income, Canberra is roughly half this level at 18%. 405 This performance is,of course, largely a consequence of the Territory’s higher than average household incomes.Housing affordability is nevertheless an urgent public policy imperative for the ACTGovernment.As is the case in other jurisdictions, increases in housing prices over the last decade have hada disproportionate impact on lower income households. In Canberra’s relatively smallhousing market higher prices have severely restricted the opportunities for lower incomehouseholds to enter the mortgage market, putting further pressure on Canberra’s rentalmarket and public housing waiting lists.As elsewhere, the rise in house prices in Canberra can be partly linked to the increase inAustralia’s population as a result of significantly higher levels of immigration. Moredirectly, however, Canberra’s housing market has been fuelled by strong growth in theAustralian Public Service and by lingering ‘pent-up’ demand as a result of several years ofundersupply exacerbated by the loss of over 400 houses in the devastating Canberra bushfiresof January 2003.Land Management in the ACT – Processes and ProblemsAll land in the ACT ultimately belongs to the Commonwealth of Australia and its use isstrictly controlled under a leasehold system, managed by the ACT Government. This leavesthe ACT Government uniquely positioned to manage the supply of land available forresidential and commercial development and the nature of that development. It does this byreleasing land in a four year forward program.While recent efforts by the ACT Government to increase land supply have seen a significantrise in the number of dwelling sites released to the market, the increase has not preventedCanberra experiencing similar if not greater growth in house prices as other Australian cities.It also needs to be noted that external factors including the Environmental Protection andBiodiversity Conservation Act 1999 (Cwlth) (EPBC Act), have the potential to materiallyaffect the yield potential of greenfield development fronts, including, for example, Molonglo.The Complexities of Bringing Land to MarketThe Government’s aim of having ‘land on the shelf’ for development requires land beingprocessed through a series of planning and regulatory stages. Raw land must first be made‘zoning ready’ - a process which requires development of an appropriate zoning for an areaof land and amendment of the Territory Plan. This can take up to eight years for newdevelopment areas. ‘Zoning ready’ land must then be made ‘planning ready’ – a process405 Real Estate Institute of Australia (2010), Housing Affordability Report June 2010 to September 2010. Canberra, p. 3.Sustainability, Housing Affordability and Transport: 303