No cashing in on connections

No cashing in on connectionsMinister Turnbull’s response to the Vertigan review indicating that full cost recovery will not be sought from developers for NBN to be delivered in new housing estates is welcome relief for an industry swimming in charges, red/green tape and tax largess.The Independent Panel reviewing the NBN has recommended shifting the full cost of delivering NBN to developers and buyers, said Nick Proud, Executive Director of the Residential Development Council.”Home buyers already pay roughly $80,000 in Sydney, $60,000 in Melbourne and $,000 in Brisbane for infrastructure to be delivered to an average priced housing lot.”This proposal would add up to a further $4,000 and will put home ownership further out of reach at a time when the country should consider how to improve supply and reduce housing cost.”To put this into context, developers paid roughly $0 per lot under the old Telstra copper system.”Buyers in new housing estates, predominantly those purchasing their first home, would be slugged to build the system while established suburbs residents will pay a substantially cheaper connection fee.”The recommendations still provide no guidance on how costs for NBN ‘head works’ will be apportioned and recovered from successive developers operating in a single urban growth corridor.”The panel’s assumption that the location of development is within the control of developers ignores the fundamentals of the housing market, which relies on urban expansion to provide affordable new housing.”The Independent Panel’s recommendation that existing contracts between developers and the NBN Co be renegotiated is concerning for the industry.”The panel has also recommended an education programme be provided for developers who feel aggrieved by the proposed arrangement, but it would be buyers, not developers adversely impacted.”The Residential Development Council will look to ensure these recommendations do not land on new home buyers, or dampen supply of new dwellings which would place upward pressure on prices,” said Mr Proud.Media contact: Nick Proud, Executive Director – Residential Development Council: 0408 538 126