Will the Rise of the Housing Market Help Reduce its Price?
Last Wednesday, opposition leader Matthew Guy pledged to provide nearly 300,000 lots to boost Victoria’s housing market in an attempt to lower home and mortgages loans in Australia. However, the experts claim this movement will not necessarily help lower its prices.
The Promise of New Land
Mr. Guy claimed that the State Government has the power to lower down the rising house prices if it would release more lands in the outer suburbs in Melbourne. Furthermore, Guy accused the Premier Daniel Andrews of Victoria for his inaction to help his fellow Victorians to enter the affordable housing market.
According to him, their inaction has resulted in a surge of inequities where acquiring a house and lot package 50 kilometers away from the CBD would cost you around $400,000- $550,000. Meanwhile, the Planning Minister Richard Wynne claimed the Labor plans to release around 100,000 lots at the end of 2018 and the remaining 190,000 lots for the next coming years.
They will also establish a coalition plan where the council areas of Casey and Cardinia, Hume, Melton, Mitchell, Whittlesea, and Wyndham will be given new lands to battle the housing and infrastructure shortages of these fast-growing outer suburbs.
The Coalition will also fasten their planning approvals to fulfill their promise by mid-2020 and provide housing supply to these suburbs for the next 12 years. And those local councils and authorities who delay the new land supply may have to face financial sanctions and penalties. Mr. Guy also said this plan of his will help decentralize Victoria from Melbourne and he believes that the rise of 290,000 lots and housing in outer suburbs will not increase Melbourne’s footprints. Furthermore, this new movement will force the developers to lower their prices to compete. Thus, providing better opportunities for potential home buyers.
While Guy’s plan looks promising, some house experts beg to disagree. The Director of the Center for Urban Research Jago Dodson, for example, claimed that flooding the state with lots and land options would not result in price reductions.
The Planning Professor at the University of Tasmania, Jason Byrne, seconded Dodson’s claim. He said that the introduction of low-cost housing in the outer suburb will likely result in a price increase in other fringe areas, especially within the Victoria CBD. He also claimed that people cannot really lower down their cost through these affordable housing if they still need to spend more money in commuting just to go to the city and work.
If they don’t have an access to jobs or livelihood near the outer suburbs, they’ll still be forced to go to the city. Thus, he believes they won’t be able to save more money, but rather, they’re only transferring their costs.
The Urban planning professor Peter Phibbs of the University of Sydney also said that commuting to the outskirts of a city and traveling back to their low-cost yet long-distanced home not only drains the people financially but it also impacts their well-being. He stated that many research shows how long commutes exhaust a person and it’s detrimental to their physical and mental health.
This new movement of Guy received criticisms from the public, especially the Housing Minister Martin Foley who claimed he couldn’t trust the Coalition for this affordable housing plan. He questioned who would believe his word when it comes to planning when he didn’t do anything for four years of staying in the government.
He also reminded the people that he’s the man who brought the Ventnor, Fishermans Bend, who engaged in secret meetings and shonky deals with developers for political donations.
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