Out of today's The Age Newpaper
New homebuyers paying for infrastructure
November 6, 2006 - 7:24AM
Buyers of new houses and units in Brisbane and Sydney are footing the bill for the infrastructure needs of the rest of the community, a new report has found.
The problem could soon make new housing unaffordable in both cities, according to the report on levies imposed by state and local governments, commissioned by the Property Council of Australia (PCA).
The report, by independent advisory firm Urbis JHD, showed that since 1995, total infrastructure charges for new houses skyrocketed by 466 per cent in Sydney and 279 per cent in Brisbane.
For units, the increase was 130 per cent in Sydney and a whopping 497 per cent in Brisbane.
But the estimated rise in the cost of engineering construction over the same period in both cities was just 38 per cent.
Ross Elliott, executive director of the PCA's Residential Development Council, said state and local governments had imposed the costs on developers who in turn passed them onto new home buyers for new amenities and services.
These included parks, public transport, swimming pools and libraries, instead of only basic services such as water and sewerage which the levies had covered in the past.
The resulting cost of providing infrastructure to a new home in a Sydney development was $68,233, instead of $1,752 for the basic amenities.
In Brisbane, new house buyers incurred charges of $16,701 compared to an actual cost of $3,415.
"They are charging much more than is actually necessary to provide infrastructure than that dwelling actually requires," Mr Elliott said.
"The infrastructure levies (governments) charge help pay for things the whole community enjoys."
But new home buyers appeared to have escaped the levies in Melbourne where the total charges had risen 40 per cent since 1995, in line with construction costs.
"There is clearly no logic in that at all and clearly we just view this as a tax grab," Mr Elliott said.
"This is a levy on the development and it is passed straight onto the homebuyer who also has to pay stamp duty and land tax and GST."
At Caboolture, north of Brisbane, developers had been forced to pass on a public transport levy to new home buyers in housing estates for a service they did not have.
The levies were artificially inflating house prices and stunting growth in Sydney which had recently posted the lowest number of housing starts in 40 years.
"The NSW market is virtually comatose," Mr Elliott said.
"Meanwhile, the Perth market has been going nuts."
He called on state and local governments to adjust their public policy settings or face the prospect of putting new homes out of reach in what was already an expensive market.
"This is not sustainable. You are really going to kill housing affordability for generations of Australians," Mr Elliott said.
© 2006 AAP
Brought to you by aap
This answers the question for me 'Why is it so dear to build since we last built ?". A builder told me during the holidays that 40% of a new home is government charges.
Sheryn
New homebuyers paying for infrastructure
November 6, 2006 - 7:24AM
Buyers of new houses and units in Brisbane and Sydney are footing the bill for the infrastructure needs of the rest of the community, a new report has found.
The problem could soon make new housing unaffordable in both cities, according to the report on levies imposed by state and local governments, commissioned by the Property Council of Australia (PCA).
The report, by independent advisory firm Urbis JHD, showed that since 1995, total infrastructure charges for new houses skyrocketed by 466 per cent in Sydney and 279 per cent in Brisbane.
For units, the increase was 130 per cent in Sydney and a whopping 497 per cent in Brisbane.
But the estimated rise in the cost of engineering construction over the same period in both cities was just 38 per cent.
Ross Elliott, executive director of the PCA's Residential Development Council, said state and local governments had imposed the costs on developers who in turn passed them onto new home buyers for new amenities and services.
These included parks, public transport, swimming pools and libraries, instead of only basic services such as water and sewerage which the levies had covered in the past.
The resulting cost of providing infrastructure to a new home in a Sydney development was $68,233, instead of $1,752 for the basic amenities.
In Brisbane, new house buyers incurred charges of $16,701 compared to an actual cost of $3,415.
"They are charging much more than is actually necessary to provide infrastructure than that dwelling actually requires," Mr Elliott said.
"The infrastructure levies (governments) charge help pay for things the whole community enjoys."
But new home buyers appeared to have escaped the levies in Melbourne where the total charges had risen 40 per cent since 1995, in line with construction costs.
"There is clearly no logic in that at all and clearly we just view this as a tax grab," Mr Elliott said.
"This is a levy on the development and it is passed straight onto the homebuyer who also has to pay stamp duty and land tax and GST."
At Caboolture, north of Brisbane, developers had been forced to pass on a public transport levy to new home buyers in housing estates for a service they did not have.
The levies were artificially inflating house prices and stunting growth in Sydney which had recently posted the lowest number of housing starts in 40 years.
"The NSW market is virtually comatose," Mr Elliott said.
"Meanwhile, the Perth market has been going nuts."
He called on state and local governments to adjust their public policy settings or face the prospect of putting new homes out of reach in what was already an expensive market.
"This is not sustainable. You are really going to kill housing affordability for generations of Australians," Mr Elliott said.
© 2006 AAP
Brought to you by aap
This answers the question for me 'Why is it so dear to build since we last built ?". A builder told me during the holidays that 40% of a new home is government charges.
Sheryn
