A scheme to boost apartment construction in Adelaide’s CBD by improving investment confidence in development projects has been unveiled by the South Australian government as a major election commitment.<\/p>\n
The government said that, if returned to office at next year’s March poll, it would financially underwrite up to $500 million worth of apartment construction in what it described as the “mid-tier of the market”.<\/p>\n
But the government said money from that half-a-billion-dollar fund would only be spent if apartments constructed under the scheme failed to sell.<\/p>\n
“We are in effect acting as a guarantor,” Premier Peter Malinauskas said.<\/p>\n
“The developer, the builder will then construct the apartment and sell those apartments, and our guarantee will only be called upon if those sales are not actually achieved.<\/p>\n
“In the event that, for some unknown reason, the sale doesn’t occur then the government will be able to acquire that apartment at a 10 per cent discount below the market value.”<\/p>\n
SA Premier Peter Malinauskas announced the policy at the Labor state convention. (ABC News)<\/p>\n
Mr Malinauskas, who announced the policy at Labor’s state convention, said that over the past decade, more than 2,400 proposed CBD apartments that had been granted planning approval had not been built.<\/p>\n
He said incentivising construction and improving affordability were central aims of the scheme, which he said would apply to apartments that were sold for less than $1 million.<\/p>\n
“We have to unlock housing in our city that is affordable and accessible to working people,” he told the conference.<\/p>\n
“Nurses at the RAH [Royal Adelaide Hospital] and the police officers in Hindley Street can’t aspire to luxury apartments in the East End that cost over $1 million a pop.”<\/p>\n
<\/p>\n
Cranes at a construction site in Adelaide’s CBD. (ABC News: Dean Faulkner)<\/p>\n
The proposal is similar to one announced in New South Wales, and Mr Malinauskas said the government’s intention was to stimulate construction by boosting confidence in projects from the outset.<\/p>\n
“There are over 2,400 apartments that have already got development approval in our CBD that aren’t being built because of market failure regarding pre-sale requirements to underpin financing,” he said.<\/p>\n
“Most people, particularly young professionals, when they’re entering the market, they don’t want to buy something they can’t yet see, so what we’re facilitating is for the apartments to get built so they can actually buy them.”<\/p>\n
Developer backs plan but opposition questions affordability<\/p>\n
The policy has the support of the Property Council of Australia (PCA), whose board member Nick Emmett described it as a “great enabler for supply”.<\/p>\n
“[It] will accelerate the amount of apartments that can be built in the CBD,” he said.<\/p>\n
“We have market failure in terms of the market not delivering enough \u2014 this will go some way to bringing more stock to the market.”<\/p>\n
<\/p>\n
The Property Council of Australia’s Nick Emmett says such a policy would help boost supply. (ABC News)<\/p>\n
Under the scheme, the government would act as guarantor on “up to 50 per cent of dwellings in eligible off-the-plan developments, up to a cap of $30 million per project”.<\/p>\n
Eligibility criteria that developers would be required to meet include having both planning approval in place and a “proven track record” in delivering apartments, the government said.<\/p>\n
“An establishment fee of $50,000 and an annual facility fee of 1 per cent on the guaranteed value would apply to successful applicants,” the government said.<\/p>\n
While the government said it was aiming to have the policy in effect by May 1, opposition housing spokesperson Michelle Lensink said she wanted to see more detail.<\/p>\n
“We’re not saying that it’s not something that we’d do but just on the face of it, it looks like an awful lot of money for potentially a small amount of product,” she said.<\/p>\n
“The criteria look like they’re quite tight.”<\/p>\n
<\/p>\n
SA Liberal housing spokesperson Michelle Lensink says she wants to see more detail. (ABC News)<\/p>\n
She questioned the affordability of housing under the scheme.<\/p>\n
“If the government is labelling $1 million as an affordable home, well, that’d be very interesting news for South Australians,” she said.<\/p>\n
“I don’t think you’ll find too many young individuals or couples who’ll be able to buy at that price point.”<\/p>\n
But prominent property developer Theo Maras has backed the scheme.<\/p>\n
He said it would have the dual effect of “bringing back” confidence in apartment development and strengthening the residential population in the CBD.<\/p>\n
<\/p>\n
A view of the Adelaide CBD skyline in 2022. (ABC News: Che Chorley)<\/p>\n
“There is no city in the world that can be viable without people living in it,” he said.<\/p>\n
“Seventy years ago, we had 75,000 people living in the city of Adelaide \u2014 we’ve got 35,000 people living in the city of Adelaide today.<\/p>\n
“We need to have affordable housing for key workers and we need to have affordable housing for families.”<\/p>\n","protected":false},"excerpt":{"rendered":"A scheme to boost apartment construction in Adelaide’s CBD by improving investment confidence in development projects has been…\n","protected":false},"author":2,"featured_media":239307,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[62760,64,63,22674,99,2603,11758,119625,121505,191,1194,1481,7688,24805,13408],"class_list":["post-239306","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-apartment","tag-au","tag-australia","tag-building","tag-business","tag-cbd","tag-construction","tag-guarantee","tag-high-density","tag-home","tag-homes","tag-house","tag-housing","tag-peter-malinauskas","tag-sa-government"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/239306","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=239306"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/239306\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/239307"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=239306"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=239306"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=239306"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}