This was published 13 years ago
Home trust aims to halve the cost of buying a Sydney home - buy the roof over your head, not the land under your feet
By Kelsey Munro
Priced out of the market by the rollercoaster ride taken by land prices? A US scheme coming to Sydney offers a chance to cut the cost of buying a home by up to half.
Sydney home buyers are to be offered the chance to purchase at least part of what they really want - they will be able to buy the roof over their heads but not the ground under their feet.
That, as the American experience has shown (see graph above), can halve the price of a home.
Schemes in the US similar to the newly created, Bondi-based, Waratah Community Land Trust Association have halved the cost of buying a home, but the biggest obstacle to getting so-called community land trusts up and running is acquiring suitable properties in the first place, exponents admit.
A graph from a trust report showing the difference in median prices sales of homes in Vermont by market price and trust price from 1988 - 2008.
In Bondi median house prices are are running at well over $1 million, and units at more than $500,000.
Spearheaded by private citizens, Waratah plans to introduce the new form of owner-occupied, resale-restricted housing to the Sydney market which is being touted as a middle way between social housing, rentals and the private property market.
Under the land trust model, the trust owns the land in perpetuity and members buy only the dwelling on it, dramatically reducing their mortgages. Owners pay a nominal lease for the land and may later sell the dwelling to other trust members so they can get equity back from the investment.
A director of the Sydney Credit Union, Mark Swivel, who is involved in the Waratah trust, said the model lined up well with the values of the mutual sector and could be a partial solution to the housing affordability crisis.
''It sits between social housing and the law of the jungle that applies in the open market,'' he said. A lease agreement between the occupier and the trust spells out maintenance responsibilities and the value of the property over time.
A similar organisation started recently in Castlemaine, Victoria, with membership fees of $20 a year, and has received property bequests in wills.
To acquire land in Sydney, the Waratah trust hopes to receive bequests, unused property on Crown land or other investments from governments and councils, and private finance from philanthropists and corporate foundations.
The Waratah trust will be launched this weekend, and its chairwoman, Liz Page, hopes to get properties under the trust's stewardship by year's end.
Sydney home buyers are to be offered the chance to purchase at least part of what they really want - they will be able to buy the roof over their heads but not the ground under their feet.
''It's a fiscally conservative and socially progressive model that appeals to everyone,'' said Dr Louise Crabtree, of the Urban Research Centre at the University of Western Sydney.
''The model aims to bridge the gap between affordable rentals, community housing and market rate ownership. We're trying to create more rungs on the housing tenure ladder.''