Noel Towell June 08, 2012
Land Development Agency blames an economic slump and red tape for a dive in sales. Photo: Anthea Russo
The ACT government's land sales agency is blaming an economic slump and federal government bureaucracy for a $210 million drop in sales revenue this year.
The Land Development Agency has warned its political bosses not to expect a full recovery for several years, writing down its revenue expectations for the next financial year by another $96 million.
The disappointing result is a key driver of the $125 million budget deficit result projected for this financial year.
The LDA is tipped to achieve a pre-tax profit of just under $200 million, despite the sales slump, but next year expects to make just $103 million, gradually improving to an expected profit of about $236 million in 2015-16.
The agency's statement of intent for the next four years shows the new development fronts of Gungahlin and Molonglo will continue to be the capital's land release hot spots, but established districts such as Tuggeranong, Belconnen and central Canberra will also see steady levels of new releases until 2016.
The LDA budgeted for revenue from land sales of nearly $690 million this financial year but the agency's operating statement shows that just under $480 million will be achieved, a $210 million shortfall.
A failure to reach the government's goal of bringing 5500 dwelling sites to market this year, with land for just 3000 blocks and apartment sites delivered, is partly to blame for the disappointing result, according to the agency.
The Canberra Times revealed in February that residential land releases, worth up to $2.5 billion, in the ACT were being hit with long delays because of a bureaucratic bottleneck, with the ACT government blaming its federal counterpart for the hold-up. It says delays in carrying out checks required under the Environment Protection and Biodiversity Conservation Act meant that builders could not get on site to construct vital services in Molonglo Stage II, Moncrieff, Lawson and Throsby, where between 8000 and 10,000 new blocks are earmarked to come to the market in the next two years.
But economic uncertainty, leading to shaky business confidence, also played a part in the dismal LDA result this year, the statement of intent said. ''The decrease of $210 million in the 2011-12 estimated outcome from the original budget relates to lower than expected settlements from residential commercial and industrial lease sales due to slower than expected receipt of regulatory clearances and decreased demand in the industrial and commercial sector,'' it said.
''The decrease of $96 million in the 2012-13 budget from the 2011-12 estimated outcome is largely due to decreased land sales revenue from residential lease settlements in 2012-13 reflecting delayed releases in the 2011-12 and 2010-11.''
The agency expects Belconnen to be the hub of land release activity next year with sites for 1850 dwellings, many of them apartments released, outstripping land releases in Gungahlin and Molonglo.
But the new development fronts are projected to be the centre of activity again in the following years, with about 4400 blocks in Gungahlin and about 3300 sites in Molonglo due for release.
The development of industrial suburb Hume will continue this year, with 102,000 square metres of space to be made available in the southern district - the only new industrial land planned for release in the 2012-13 financial year.