Suburban Land Agency CEO Adam Davey: “Within our constraints, we still can be quite proactive”. Photo: Ian Bushnell.
The ACT Suburban Land Agency had been slow in the past to adjust its land prices, but is now much more responsive to the market, CEO Adam Davey says in response to criticism that the agency’s pricing was too rigid.
Speaking at a Master Builders ACT event on Wednesday (18 February), Mr Davey also sought to “dispel the myth” that the government development agency indulged in land banking.
Mr Davey said that since he took over at the SLA in 2024, land that was not selling had been reduced in price and had promptly sold.
That occurred in Jacka 12 months ago when it was clear prices were too high, and they were cut by 10 or 11 per cent.
“Hence we sold a lot of land, and that’s a really good feeling that land’s going out the door, people are being able to buy it, people are being able to build on it,” he said.
The SLA recently re-released land in Jacka and Whitlam that had not sold or had been handed back to the SLA and then sold at lower prices, and already there had been 300 enquiries for over-the-counter sales.
“If I could adjust prices unilaterally, I’d certainly take that approach, but within our constraints, we still can be quite proactive in trying to generate and stimulate interest,” he said.
Mr Davey said land valuations could be done more routinely.
“I think we could do it annually,” he said.
Builder feedback indicates that the high cost of land, combined with building costs, is pushing potential buyers out of their $900,000 to $1.1 million budget to $1.4 million or $1.5 million, forcing them to the established suburbs or into apartments and townhouses.
Mr Davey acknowledged that affordability was a wicked problem and that construction costs had also driven up the price of building a home, but the market price was determined through an independent valuation process.
“We need to be responsive [but] we also have a duty to the taxpayer as well,” he said.
“We need to be transparent in the way we price, and we need to be fair.
“There’d be an expectation that we don’t sell ACT Government land way under value, although that would be a much better challenge to have than we have today.”
Mr Davey said buyers could adjust their expectations of what was possible to build within their current budgets.
“We’ve got a [246 sqm Whitlam block] for around $475,000, you’d be building a pretty expensive house if it got to $1.4, $1.5 million,” he said.
In Jacka, there were blocks of about 400 sqm priced at about $570,000.
“So again, to get to $1.4 million, it’d be a reasonably large house,” Mr Davey said
He said the fact was that there was not much land available suited to single-lot development, and the SLA certainly did not want to sit on any of it. The government also wanted more land for homes on the market.
The agency’s mission was to deliver land at a rate greater than the market could absorb.
“I’d like to be able to do that,” Mr Davey said. “We’re not quite there yet.”
He said the agency was always criticised for holding on to land to achieve better prices, but that was not the case.
“If I’ve got land that I can release, the message is very clear to our team: let’s get it on the market,” Mr Davey said.
