LANDOWNERS in Keswick Estate could soon be free to develop smaller-style homes under a plan being considered by the Dubbo City Council to slash the 180 square metre building covenant.
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The council is reviewing the covenant in a bid to create new streams of accommodation to help relieve some of the pressure created by the city’s housing availability shortage.
The covenant has been a largely contentious issue dividing the council, as developers, and those representing Dubbo’s real estate market.
Until now homes built in Keswick Estate have been forced to comply with the covenant - giving builders little room to develop housing smaller than the standard four-bedroom, two bathroom, double garage dwelling currently occupying the area.
Council general manager Mark Riley said one of council’s objectives had been to create opportunities for first home buyers to enter the market.
“In 2000, council had an adopted objective to meet the market’s requirements in times of both high and low demand and on the basis of maximising the returns to council while ensuring that land is available at market prices to promote the continued growth of the city,” Mr Riley said.
The review has been backed by Ray White director Brian McAneney who said problems created by late covenant changes would be out-weighed by fewer building constrictions.
“The 180 square metre covenant was put into place based on what was right and where the developers thought the market was at the time,” he said.
Mr McAneney said the current covenant, plus the price of land were largely out of most first home buyers’ reach.
“Hence dropping the covenant at Keswick would encourage more first home buyers to go into the area,” Mr McAneney said.
The move is long-overdue according to Raine&Horne managing director Ken Mongan, who said Keswick Estate was originally developed to create lower-cost land and building options for local people.
“The council has the cheapest land in the Dubbo region but unfortunately they have increased their land in relation to other contractors,” Mr Mongan said.
At the moment the average cost of building is between $1200 to $1500 per square metre in the Keswick Estate.
The price for council’s 180 square metre covenant comes at an average cost of between $216,000 and $270,000 per home built in the estate.
The average land price at Keswick Estate is $123,625. The final cost of the house would be between $339,625 and $393,625. The average block size in its next release is 816 square metres.
The median house price in Dubbo for the year to June 2013, was $280,250.
Dubbo Chamber of Commerce and Industries vice president Megan Dixon said providing more affordable housing would have been part of council’s plan for Keswick Estate due to the nature of supply and demand.
This Craftsman Homes floor plan measures just over the 180sqm minimum size. This one is 182sqm but shows the average housing plan.
“If there was no supply prices would go up but having extra supply puts downward pressure on prices, so that would have been part of the equation,” Mrs Dixon said.
She said the issue was a double edge sword given council has a profit motive as developers.
“It’s important the council plays its role in terms of trying to keep the city as competitive as possible.
“As long as the council achieves its profit motive that contributes to keeping the city affordable and uses its profits to regenerate the city then that’s not a bad thing,” Mrs Dixon said.
“It’s important the council plays its role in terms of trying to keep the city as competitive as possible.
“As long as the council achieves its profit motive that contributes to keeping the city affordable and uses its profits to regenerate the city then that’s not a bad thing,” Mrs Dixon said.
But real estate principal Bob Berry said the council had no obligation to sell land cheaply.
“They should sell it at market value to recover their costs and make a profit, which they’re entitled to do because those profits are used for other purposes in the city to benefit the community,” Mr Berry said.
Council purchased the Keswick Estate property in 1974 to supply land and stimulate housing development when Dubbo had few developers and sold its first lots in 1998. It will consider the change at a meeting tonight.
