Media Releases

Adelaide land release welcomed by developers . . .but “more can be done”, says Devine Communities

Friday 27 July 2007

Devine Communities, one of Australia’s most active developers, has praised the South Australian Government’s decision to free-up 2,000 hectares of land in Adelaide.

The announcement by Premier Mike Rann and Urban Development Minister Paul Holloway breaks an artificially-created land barrier imposed by the previous government.

“It is a vital step in ensuring new housing in Adelaide will return to more affordable levels,” said Mr Paul Nash, Devine’s National Manager of Housing-and-Land.

“Adelaide has the greatest level of Government-controlled land of any Australian city, and with a stuttering release program to the market over recent years it has created acute land shortages for home buyers. This low level of available home sites in the market has flowed on to inflate prices sharply in Adelaide.”

While welcoming the increase in the urban growth boundary, Mr Nash said the government still held vast amounts of undeveloped residential land within the old boundary. “This is land zoned for housing that should be released to the public promptly,” he said. “Restricting supply creates inflationary pressures on land prices and pushes home ownership that little bit further out of the reach of Adelaide residents.”

Research from The Housing Industry of South Australia supports Mr Nash’s calls. It reports that Adelaide’s land prices have risen 107.3% since 2001 compared to the modest increase in building prices of 13.35%*. The HIA largely blames this land price escalation on the Government’s urban growth boundary, and the restrictive land release policy under the management of its Land Management Corporation (LMC).

Mr Nash also questions the government’s claim that the extra 2,000 hectares will meet housing needs “for the next 15 to 20 years”.

“Our estimate is that this new land will still be held up in planning for a few years before home buyers can purchase a block, and when it is available the pent-up demand for housing in Adelaide may significantly reduce the 15-to-20 year supply expectations forecast by the government,” Mr Nash said.

“Without land, Adelaide’s long-held housing affordability advantage over other mainland States has been eroding, which has correspondingly slowed building activity. If it had been left uncorrected it would likely have impacted adversely on the State’s immigration and population growth targets.

“Devine appreciates the complexities and difficulties involved for the Government in balancing the need for land supply and providing appropriate infrastructure and amenities. This current review of the growth boundary and announcement by the Premier and Minister is applauded by Devine as a significant course of action to keep housing within the reach of home buyers,” Mr Nash said.

* HIA, February, 2007
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Released by: Devine South Australia, Ground floor, 212 Pirie Street, Adelaide 5001
Contact: Steve Weightman, SA State Manager, (08) 8306 5678, 0411 866 443
Paul Nash, National GM Housing & Land, on 0439 730 424
Prepared by: Barry Hyland of PR Plus, Level 1, 272 Pacific Hwy, Crows Nest 2065 on
Ph: (02) 9439 9191, Fax: (02) 9439 9190. pluspr@ozemail.com.au