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Sydney Suburbs (NSW) Inc.
News Release August 2004
Land Shortage generates big profits
An article in the Sydney Morning Herald this morning "Property giant devours retail sites" (10 August) provides another example of the sale of residential units funding other avenues of development. A Westfield redevelopment plan for the Pitt Street Mall included a controversial plan for two 10-storey residential towers above Centrepoint.
The article states "The proposed residential towers were put forward as a way to fund the overall arcade refurbishment". This implies that so much money can be made from selling units that other otherwise unaffordable development (in this case arcade refurbishment) can be undertaken.
Looking back at our news-email
of 31 July on the Oasis controversy we asked where the money for this project
would have come from. The sports facilities could never be viable on their own.
We speculated that the funding for all this would have been substantially underwritten
by profits from the sale of the residential units also proposed and went on
"And why can such huge profits be made from selling residential units? Because the State Government severely restricts the release of residential land. The Housing Productivity Commission refers to this in its recent report on the affordability of houses. The 50,000 people coming into Sydney each year have to find somewhere to live. So, in the face of an artificially restricted supply, the price of homes rockets up. We know that this scarcity allows developers to make huge profits on building units."
The reason for exorbitant housing cost lies squarely with State Government politicians and its Planning Department DIPNR. They create a land shortage which will allow developers to make large profits.
Save Our Suburbs (SOS)
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