Re: Huge Land Bank Puts Squeeze on Buyers – The Age (Melbourne)
Land banking is a normal market reaction to a regulatory regime in which land for new housing is severely rationed. Like any business, developers must ensure that they have sufficient inventory to operate. With arbitrary planning policies that ration land, it would be easy for a developer to be driven out of business because competitors have cornered the market (for land). Yes, it is outrageous that a block of land for a house costs $180,000, but do not blame the land bankers, blame the government policies that have unnecessarily made housing unaffordable for the average Australian.
In Atlanta and Dallas-Fort Worth, the high-income world’s fastest growing metropolitan areas, finished (serviced) land for new housing is at least 75% lower than in Melbourne. This is because these metropolitan areas have not implemented the destructive urban consolidation (smart growth) policies that have been imposed in all of Australia’s largest cities.
The result, of course, is that residents of Dallas-Fort Worth and Atlanta spend far less on housing and have more discretionary income to spend on other goods and services.