No sale: units reaching saturation point
Canberra's market for apartments and units could be at ''saturation point'', with the ACT government failing in recent attempts to sell residential land packages zoned for multi-unit development.
The land at Belconnen, Gungahlin and Molonglo failed to sell despite being ripe for development into apartments, shops and offices and being free of the controversial change-of-use charge.
Treasurer Andrew Barr said the lack of takers for the sites was an indication that the market for units and apartments is cooling.
''We went to the market last week to sell three multi-unit sites and none of them sold,'' he said.
''It would appear in the marketplace right now that units are pretty much at saturation point.''
Mr Barr said approvals for units in Canberra reached an all-time high in October 2010 when 819 such dwellings were approved. ''A lot of those properties are now hitting the market and hence as supply lifts up, you're starting to see the impacts on price,'' he said.
''But there is demand still for sub-$400,000 detached dwellings or terraces or courtyard-style dwellings that aren't multi-unit developments … so our land release and taxation policies will certainly favour that style.''
Mr Barr said the shift in the market meant it would be unrealistic to expect the level of urban infill seen in recent years to continue. ''What we're basically saying in terms of city form and planning strategy more broadly is that it would be unrealistic to expect 50 per cent of urban infill coming from units in the next period because there isn't that demand.
''But where we can influence that sort of development to occur is in Civic and Northbourne Avenue.''
Mr Barr said a ''massive acceleration'' of land release and housing supply that had been underpinning the territory's economy for ''some time'' was slowing down.
''If you make the assumption that a contraction in Commonwealth public service employment will ease off the demand side, then there is a case to be made that, on the units side, anyway, we have a fair supply for a fair bit of time and the market is reflecting that,'' he said.
The 3400sqm Belconnen site that failed to sell could accommodate up to 235 dwellings, offices or shops and has a price tag of $5.75 million.
Two multi-units sites in the Gungahlin suburbs of Franklin and Harrison were offered at auction early this month and also failed to sell.
The Franklin site, which could accommodate up to 78 dwellings, was priced at $2.25 million.
The government is in talks with the highest bidder for the 7700sqm Harrison site and hopes a deal can be done.
Another land parcel, zoned for a high-density development of up to 85 units, remains for sale in the Molonglo suburb of Wright.