Agree with peoples sentiments about the high prices in Sydney then moving onto, brisbane, Perth, Melbourne etc the thing is though I reckon Sydney is different.
The regulatory landscape around development is atrocious. Land release does not keep up meaning developers are over the barrel whenever they buy raw land and if this was not enough the government supposedly to tax away windfall profits then taxes the developers at every level of government from GST (OK so its all voer Ausralia) to council duties to state gov levies.
You have some DH from state government saying, but we have released 9000 properties and we only have growth plans for 5000 new residents etc, but the thing is developers need to be able to choose where to buy. If their is only a few options they pay over the odds for this land and it then becomes non feasable to develop and hence less development occurs.
The cost of the developing itself, building, land procurement etc none of these are larger than the taxation burden on a new block of land which stands at about 35% of the total cost to bring a greenfield block to the market in Sydney.
On those 450k blocks at Kellyville 150k of it is tax to the government. How do they even expect houses to be affordable if they tax this very thing so heavily? How much would power be if they took the same approach? Oh opps thats right that is the next thing they are hitting...
Its not about land price its about government cost component. It fits perfectly. 1995, Bob Carr releases his consolidation plans for Sydney. Watch what happens next.
I am not sure what will drive this into the future though, as I cannot see them milking anymore from development surely?
Other states that went the way of Sydney with high prices had a large supply response, Melbourne IMO is about to have a ruder shock than even Brisbane and Perth based on completions alone.
This will in time see these markets correct. Sydney is different. the government is far more useless when it comes to being progressive, building the infrastructure, releasing the land and leaving people to get on with the job of providing accomodation for a growing population.
People say infrastructure improves property prices. It does if a previously disconnected piece of real estate becomes connected, look at Woronora or Alfords Point when Woronora River Bridge was a goer. But globally for a city the release of good infrastructure connecting new suburbs and release of land so developers can choose where to develop puts negative pressure on prices not positive.
It is why I suspect the not in my backyarders are not always altruistic in their intentions when they spot legless lizards or flightless owls in the neighbouring burbs pegged out for development.
The regulatory landscape around development is atrocious. Land release does not keep up meaning developers are over the barrel whenever they buy raw land and if this was not enough the government supposedly to tax away windfall profits then taxes the developers at every level of government from GST (OK so its all voer Ausralia) to council duties to state gov levies.
You have some DH from state government saying, but we have released 9000 properties and we only have growth plans for 5000 new residents etc, but the thing is developers need to be able to choose where to buy. If their is only a few options they pay over the odds for this land and it then becomes non feasable to develop and hence less development occurs.
The cost of the developing itself, building, land procurement etc none of these are larger than the taxation burden on a new block of land which stands at about 35% of the total cost to bring a greenfield block to the market in Sydney.
On those 450k blocks at Kellyville 150k of it is tax to the government. How do they even expect houses to be affordable if they tax this very thing so heavily? How much would power be if they took the same approach? Oh opps thats right that is the next thing they are hitting...
Its not about land price its about government cost component. It fits perfectly. 1995, Bob Carr releases his consolidation plans for Sydney. Watch what happens next.
I am not sure what will drive this into the future though, as I cannot see them milking anymore from development surely?
Other states that went the way of Sydney with high prices had a large supply response, Melbourne IMO is about to have a ruder shock than even Brisbane and Perth based on completions alone.
This will in time see these markets correct. Sydney is different. the government is far more useless when it comes to being progressive, building the infrastructure, releasing the land and leaving people to get on with the job of providing accomodation for a growing population.
People say infrastructure improves property prices. It does if a previously disconnected piece of real estate becomes connected, look at Woronora or Alfords Point when Woronora River Bridge was a goer. But globally for a city the release of good infrastructure connecting new suburbs and release of land so developers can choose where to develop puts negative pressure on prices not positive.
It is why I suspect the not in my backyarders are not always altruistic in their intentions when they spot legless lizards or flightless owls in the neighbouring burbs pegged out for development.
