Developer says ACT land release strategy neglects lower-income home buyers

Mr Winnel made his comments at a seminar on housing affordability last week, organised by former chief minister Jon Stanhope in his role as University of Canberra professorial fellow. Mr Winnel was in the audience at the seminar, where a former senor Treasury official released explosive figures about what he assessed as highly inflated prices paid for land in recent government land releases.

Khalid Ahmed, former head of policy development in Treasury until 2013, said residents had paid $210 more per square metre (about $100,000 more per block) than the real economic value of their land in an overheated market, artificially inflated by the way the Land Development Agency designed its first auction. It sold just 100 blocks, with 1600 bidders, and the inflated prices had set the price for the entire suburb. In Lawson last year, blocks had sold for an average $900 a square metre, more than $300 over their economic value, amounting to prices up to $150,000 higher than they should have been.

Mr Winnel said while 10 per cent of people were unable to enter the housing market, the 20 per cent above that could afford a three-bedroom home if the price was less than $400,000. But they were "missing in action" because of limited land release and high prices. When the government made affordable housing a compulsory part of new developments, developers met the requirement through building one and two-bedroom units, he said.

He pointed to the next Valley land release, Denman-Prospect, where he said the government was aiming for 2000 dwellings and industry believed it wanted $150 million for the land. The size of the release pushed out smaller Canberra companies, and the style of the release, including stand-alone blocks, would push developed land prices up to perhaps $380,000, he said.

Mr Winnel said he was not critical of the government's attempts to get the most from the mid and top end of the market and address its budget problem, but he was critical of its failure to meet the needs of people on lower incomes. Driving people out of home ownership had major social consequences, including insecurity, and resulted in people reaching retirement without a home of their own.

Mr Winnel is finishing two final housing developments in the ACT, but has no land available for builders or new home buyers and no new land developments. He has 18 dwellings in Ngunnawal and 23 townhouses in to sell, and has an 85-unit development at Coombs. He had reduced his housing workforce by one-third, and would be out of all housing development except the Coombs units by about March next year, he said.

"For 27 years, much of our work has been to develop land for sale to builders and others in the ACT, particularly at the affordable end of the market, and we have no such work underway at the present time," he said.