State of Markets - ACT August 2012

AUSTRALIAN CAPITAL TERRITORY

Fast figures

• $540,000: Median house price in Canberra (RP Data)
• $1,554.50: Canberra adults’ average weekly earnings, the highest in Australia (Australian Bureau of Statistics)
• 0.9%: Vacancy rate in Canberra (SQM Research)

Lease Variation Charge bad for affordability

The ACT’s Lease Variation Charge (LVC) will have a negative impact on housing affordability and the ACT economy in general, according to an independent report.

The report, commissioned by the Property Council, found that in the year since the LVC’s introduction, the number of planning applications for multi-dwelling properties declined.

The LVC applies when a property is altered or converted into one that is more profitable.

Property Council ACT executive director Catherine Carter said the charge would have a detrimental effect for property owners.

“The increased Lease Variation Charge won’t affect developers’ profits, because the financiers won’t allow this to happen,” Ms Carter said. “The result is that where Lease Variation Charges are higher, the amount a developer can pay the landowner goes down. So, existing property owners are in fact the losers.”

$39m defence housing on the cards

A planned $39 million combined defence and private housing development in Weston would bring new infrastructure to the area, including new roads, drainage, sewers and telecommunication.

Federal Member for Canberra Gai Brodtmann said the proposed development was another example of the federal government’s investment in Canberra and it would open up opportunities for the Molonglo area.

The planned development includes 73 single-dwelling lots, 50 to be used by the Department of Defence, and three multi-unit sites with an expected 47 dwellings.

Its cost would be offset by selling individual dwellings to the investor market through a sale and lease-back program.

Work on the site is expected to begin in January 2013, with completion by December 2014.