Developers blame the long state planning process for the lack of housing, which pushes prices, amid claims that developers are also making new proposals to the market to increase their profitability.
As both major federal parties promise alternatives that will help first home buyers enter the hot real estate market, which is fueled by record low interest rates, the lack of housing supply has been highlighted as a key factor contributing to housing prices.
Melbourne Villawood Properties CEO Rory Castella said it took at least four years to develop precinct plans for growth areas in Victoria and similar plans prepared by state councils and governments in other states and territories.
“Our deliveries are very slow,” Castello said. “The planning profession seems to be at loggerheads with developers at all levels.”
However, the think tank Prosper Australia analyzed three real estate buildings in west Melbourne, one of which was changed 20 years ago, and found that the average land bank in stock was 65 percent. It was found that land prices increased by 11.45 percent per year in various buildings.
“We are surprised to see how seriously suppliers are cutting every time there is a likelihood of supplying affordable housing,” said Prosper’s director of advocacy Karl Fitzgerald.
“If we’re lucky, there may be a year or two of stable prices, but it’s very rare to see housing supply lower prices.”
He said property politicians and lobbyists were the only ones who believed that “reduced housing supplies actually work”, and replacing stamp duties with higher land taxes, mortgage ceilings and public land trusts were more “significant steps” towards stabilization prices.
However, the director of the Gratton Institute’s Transport and Cities Program, Marion Terryl, said restrictions on planning and zoning are causing bottlenecks in inner Melbourne, while resistance from city residents could cause further delays.