New research out of QUT now provides evidence of the disadvantage that new home buyers are under, compared with those purchasing existing properties. But the key message is that infrastructure charges are a direct hit to affordability generally.
The study finds that for each $1.00 of infrastructure charge, all house prices in Brisbane increase by $3.95. Broken down, new house prices increase by $4.69, existing houses by $3.56 and vacant lot prices increase by $1.69. On this basis, when the standard $28,000 infrastructure charge imposed on developers flows through the housing market and wider community it will add as much as $131,320 to the price of new home and $99,680 to existing houses. That's a whole lot more to pay on a 30 year mortgage!
While stamp duty is widely seen as a source of evil when it comes to housing affordability, this study shows that infrastructure charges are not far behind!
A FIVE-YEAR study into the cost of Brisbane homes has warned buyers were being slugged up to $131,000 for essential services. QUT research set to be released today broke down cost inputs for nearly 30,000 Brisbane homes including infrastructure charges such as roads, water and sewerage. The study, by QUT economics lecturer Dr Lyndall Bryant, was said to be the “first empirical evidence” of how infrastructure charges affected property prices in Australia. Dr Bryant said homeowners were “ultimately paying many times the actual cost of the urban infrastructure, with the banks being the winners”. PCA executive director Chris Mountford said “there is a “big inequity” over who funds community infrastructure, with new homeowners bearing a big portion of the burden than those buying existing houses.