The ability of the Land Development Agency and its agents to wring every last penny from public land sales – sharpened by continued rationing of new land releases – has never been in much doubt. Even by the agency's well-padded standards, however, February's sale of 106 blocks in Throsby was lucrative. The auction netted itabout $48 million, or an average of about $450,000 a block. The nine cheapest blocks of just 315 square metres sold for a little over $260,000, while a 1035-square-metre block brought $665,000. Throsby, which is destined to become Gungahlin's newest suburb, was marketed as a prestige development by virtue of its proximity to the town centre and nature reserves. Even so, the LDA badly underestimated the level of buyer interest – the reserves being exceeded by a combined $11 million. One block went for $172,000 more than the price set for a minimum bid.
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The agency also badly misjudged buyer interest in a Moncrieff land sale in November. This was billed as a release of affordable land and, indeed, the blocks were sold at a set price, albeit in the form of a first-come, first-served email process. The blocks, ranging in size from 287 to 870 square metres, averaged just over $280,000. Yet, all were sold within minutes of the computer sale opening (there being more than 800 registrations beforehand), leaving hundreds of potential buyers frustrated and angry.
According to Khalid Ahmed, a former ACT Treasury bureaucrat, people who've secured a foot on the ACT property ladder in recent years also have reason to feel they've been treated unfairly by the LDA. He maintains that buyers of land in Wright in 2010 paid $100,000 more than they should have, since although the economic value of the first blocks sold was $510 a square metre, households paid $740 a square metre. These prices had dictated later auction results in Lawson in 2014.
Whatever the economic value placed on land, its retail price is a function of supply and demand. And Canberra land prices have surged to record levels as a result of unprecedented population growth and the government's tacit policy of drip-feeding land releases. That Chief Minister Andrew Barr seems less abashed about this than Jon Stanhope (who was so concerned about land and housing affordability a decade ago that he had the government institute an accelerated land release strategy in 2006) is revealing.
Mr Barr presents as a politician imbued with all the traditional Labor values. His land release policies, however, delineate him as someone whose concern for the bottom line trumps the expectation of Canberrans of more modest means to buy into the housing market. With the territory's finances skewed by an unexpected $1 billion loan to deal with the Mr Fluffy legacy, that's not an unreasonable attitude. Mr Barr might argue there's always the apartment market for aspiring homeowners. But many, particularly young families want detached housing. That Labor continues to make light of their concerns might prove costly come the election.
