SA initiative keeps apartment prices low
The South Australian government is launching a new initiative to keep residential property ownership affordable for Australians.
The state government has partnered with the private sector to deliver the Apartment Construction Cost Demonstration project. The plan will involve helping developers to explore alternative techniques in construction and design so as to keep costs, and therefore apartment prices, low, which will be good news for SA residents. It will centre on the Woodville West suburb of Adelaide.
"Finding a solution to the current high construction cost of apartments will help bring down the purchase costs, meaning more South Australians will be able to afford houses in areas of their choice," said Minister for Housing and Urban Development John Rau.
To be affordable, Renewal SA is estimating the construction cost will have to be $1,800-$2,000 per square metre. This is expected to produce apartments priced between the high $200,000s and low $300,000s.
The government will work with builders, architects and the construction industry more broadly to find ways to keep costs down. Industry representatives such as the Urban Development Industry Association, the Housing Industry Association and the Master Builders Association will advise the government through an industry reference group. Those innovations which succeed in lowering the cost of construction will then be shared with the wider industry.
Adelaide a bastion of affordability
The government's project will be magnified by the fact that Adelaide is among the most affordable capital cities in terms of real estate in Australia.
According to the Australian Bureau of Statistics (ABS), Adelaide's house prices are the second lowest after Hobart, with a median house price of $405,000. Its property price index also rose by only 0.7 per cent in the March quarter of 2014, the lowest apart from Canberra, which actually fell by 0.1 per cent. This makes Adelaide a favourable location for first home buyers who don't want to break the bank.
The SA government introduced the Affordable Homes Programme in 2007, which aimed to help low and medium-income households purchase a home. It offers homes for sale exclusively to households which fit this criteria for up to 90 days. The programme has helped 720 buyers purchase their own home, with 2,793 more affordable homes on the way, though the government estimates around one-quarter of house sales in SA fall within the affordable price range.
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