Page 985 - Week 03 - Wednesday, 17 March 2010
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As I say, a range of issues were taken into account in relation to the decisions to release over this last 18 months or so a greater proportion of land to the market and that was simply as a result of enormous pent-up demand driven, in large measure, or exacerbated at least, by the government’s decision—that is, the pent-up demand was exacerbated by the government’s decision—to massively increase the first home buyers grant.
The government and indeed the LDA felt that the most efficient and the most timely way of seeking to deal with that pent-up demand, and most particularly with the enormous spike in first home buyer activity in the ACT, was by fast-tracking some releases and fast-tracking or adding to englobo releases that were already being developed, particularly at Casey and West Macgregor. It was simply about how best to meet continuing strong demand in the housing market in the ACT.
Interestingly, I see just today in the Real Estate Institute of Australia’s most recent quarterly report, which was released today, that only two jurisdictions in Australia had an increase in first home starts in this most recent reported quarter and they were the ACT and Western Australia. Indeed, in that quarter the ACT had the strongest housing continuing record in Australia.
MR SPEAKER: Ms Bresnan, a supplementary question?
MS BRESNAN: Thank you, Mr Speaker. What criteria determine which private developer gets the contract to develop land englobo? Is it just price?
MR STANHOPE: In answering that, it does need to be acknowledged that the two most recent englobo releases were by direct grant—that they were by direct grant or indeed three direct grants to a joint venture partner or arrangement and two developments, those at Casey and west Macgregor, that had initially been the subject of open auction.
In relation to auctions, there are a range of financial criteria, so it is not sufficient to say simply that the decision to sell to a particular developer is based on a winning bid. There are a number of criteria in relation to eligibility to bid in the first place. But putting that to one side and accepting that the government insists on a certain level of assessment of the capacity of the bidder, and there are indeed significant penalties, there is a significant assessment pre-auction in relation to financial capacity. That assessment determines those that are eligible or able to bid in an open auction. But certainly, accepting all those preconditions, where there is an auction, the highest bidder, having satisfied the pre-auction conditions, would be successful in acquiring the land.
Having said that, I do add that the last englobo releases, I believe—and I am sure they were the last englobo releases—of greenfields estates were by direct grant. The government took a decision in that instance that the level of pent-up demand, most particularly driven by first home buyers, justified the decision which the government took on those occasions to direct grant land, greenfields estate, to a couple of existing successful bidders.
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