Community land trust reveals $220k house plan for Castlemaine

Australians struggling to enter the property market have the potential to buy a house at a cut-rate price under a proven scheme. Here’s how it works.

Hardworking Australians priced out of the nation’s soaring property market could nab a house for as little as $220,000 under a new initiative.

An advocacy group is pitching the Community Land Trust (CLT) as a solution to the housing crisis. Under this globally proven model, the buyer owns the house, while a community-based legal entity owns and leases the land.

Economist Karl Fitzgerald, the founder and director of Grounded, is aiming to trial the scheme in the regional Victorian town of Castlemaine.

The picturesque town of Castlemaine. Picture: istock

He has been in talks with local community groups about the model, saying it has the potential to prevent future generations from being locked out of the housing market.

The concept has already taken off in northern NSW, where locals in Bellingen are working with the local council to set up a CLT on a parcel of land, with a view to expanding across the shire in a bid to make housing more affordable for locals.

Advoacy group Grounded says the initiative could help make housing affordable.

Mr Fitzgerald said the housing concept had been well-developed in the US and the UK.

He said the Castlemaine model would offer a two-bedroom home for $220,000 in an area where the median price was $739,00.

Mr Fitzgerald said this was all about providing stability for families as well as opportunities for young buyers and future generations.

“It protects local character and ensures there’s generational continuity,” he said. “Too often people grow up in a suburb and have just no chance to buy in where they grew up.

“CLTs offer the potential for land to be shielded from some of the speculative forces that are driving prices so much faster than wage growth.”

He said the rise in Airbnb properties in regional towns, that are popular with tourists, had drastically affected the supply of properties.

Karl Fitzgerald, the managing director of Grounded.

The Castlemaine Botanical Gardens. Picture: istock

“A CLT can say we want to shield this land to ensure that locals come first and from that we’ll be able to provide housing for the nurses and teachers and doctors who we need,” he said.

An affordable housing scheme in the British rural village of Duloe, Cornwall.

A 24-unit community built by the Community Land Trust of Palm Beach County in the US.

In Bellingen, the chair of volunteer action group Housing Matters, Kerry Pearse, said the community group’s recently incorporated Waterfall Way CLT had the potential to offer the area an innovative housing solution.

Kerry Pearse, chair of the Housing Matters Action Group in Bellingen.

“There’s a huge gap between local wages and real estate prices — it’s just so big now that people who are on local incomes here just can’t buy in and they’re not eligible for social housing,” she said.

“It would mean people don’t have to rely on the insecurity of private rental forever, because we need to keep people in the community working — they’re the people who keep the community going,” she said.

“Nurses and teachers and cafe workers and council staff, all those sorts of local people are really priced out.”

Ray White chief economist Nerida Conisbee says buyers need to understand all the costs.

Nerida Conisbee, chief economist for Ray White Australia, said the Community Land Trust concept was commendable but that buyers needed to be aware of site costs and what the charges would be for leasing the land as it was “more complex” than owning a house and land outright.

“I think they do need to understand exactly what all the issues are and particularly around the lease aspect – what are the charges for leasing the land and how does that play out longer term?

“It’s a little bit like being a renter long term — you’re not renting the house, you obviously own the house but you are effectively renting the land so understanding those costs is important.”

Mount Alexander Shire Council, which covers the town of Castlemaine, has been contacted for comment.

Originally published as Community land trust reveals $220k house plan for Castlemaine