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Legislative Assembly for the ACT: 2004 Week 09 Hansard (Thursday, 19 August 2004) . . Page.. 3960 ..

capital gains off the back of rocketing land prices. Empty blocks of land have been purchased and then sold for amazing profits with no building taking place and no benefit for those trying to enter the housing market.

Although intending owner-builders have always had a limited time to commence building after buying a block, land prices have risen so fast that huge capital gains have been made before the time limit for building has expired. Some properties changed hands multiple times without a sod being turned, and I suspect that some land buyers never intended to build because they knew they could make more just from the land.

One parcel of land in Amaroo was initially bought for $81,600 in March 2001 and resold a year later for $119,000. This represents a capital gain of 46 per cent. The empty block was then sold again for $170,000, making a total gain of 43 per cent. Another block of land in Ngunnawal sold for $79,000 in 2001, was sold a year later for $104,000—up 32 per cent—and then resold only four months later for $129,000, making a tidy 24 per cent gain. This is real land speculation that is happening in the ACT, and it is not acceptable

The New South Wales government recently introduced a rule that if land is resold within 12 months it can only be resold to the government’s land development agency. That immediately put an end to short-term land speculation. New South Wales is also offering up to $6,500 to help with landscaping and fences if the land is built on within 12 months. A requirement to sell an undeveloped block back to the government for its assessed value would have been a preferred approach in the ACT, but, that being said, this bill represents an improvement on the status quo.

Numerous reports show how many people are struggling to take up home ownership. Having blocks of land sold and resold without any building or benefit to the community does not make housing more affordable. So, I commend the government for preparing a bill that will help restore the spirit of our leasehold system. Some important work needs to be done there. I note that Mrs Dunne has foreshadowed some amendments and is giving us more time to consider them. On first brush I do not think enough evidence has been put forward to support these amendments. I am looking forward to more information from Mrs Dunne.

She has put forward the argument about builders selling to builders. I can see where that argument is coming from, and I am glad we have more time to consider it. However, we need to look at what is happening. There should not be a financial incentive for people to hold on to an empty block of land. If we are leaving more loopholes, we are leaving more incentives for people to hold on to an empty block of land and then on-sell it in a couple of months for a greater profit. We need to get more houses built and look at the housing mix in the ACT. This legislation as it stands will be an important step towards that.

MS TUCKER (5.05): This bill creates a mechanism to discourage land speculation in the ACT. It specifically addresses those situations where lessees do not comply with lease requirements of building on their blocks, but sit on them for some time and then sell at higher prices to someone who intends or purports to build. The ACT has a leasehold system, which means that the territory has some power over the transfer of

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