spatially; and, thirdly, that tiie public sector produced the dwellings that constituted the bottom
of Canberra's housing market These influences on Canberra's housing market had a weighty
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impact on the capacity of individual householders to benefit from owner occupation. In the first instance, owner occupants did not constitute a 'class' in objective economic terms. The evidence does not suppon the view that house prices rose consistently and provided thereby a set of uniform gains. Any benefits of this nature were received by individual owners at the expense of those households entering the market at a later date. A second point to arise out of the analysis was that Canberra's housing market, as seen through the examination of all transactions in nine suburbs, was highly structured. There were clear price differences between areas. Moreover, the housing markets of the more expensive areas were more likely to suffer substantial jumps and falls in price. From this we can conclude that the potential for capital gains, or losses, was far greater in Forrest than in Narrabundah, or Higgins. Finally, publicly- constructed housing formed a sizeable sub-stratum within the total market. Ex-govemment housing sold at consistently lower prices than both the total market and the privately-erected stocL In addition, there was far less variation over time in the market value of this type of dwelling. The public housing authority sold its stock at prices appreciably below its market value. Ex-govemment houses sold at higher prices than those charged by the Commissioner of Housing. The discount incorporated into sales by the government was an important subsidy for those persons to whom dwellings were sold.
6.3. Additions and Renovations
Dwelling prices over time are at least partly a function of value added to dwellings through additions and renovations. Investment subsequent to the purchase of a dwelling affects the circulation and appropriation of value through residential property in two ways. In the first instance, the material advantages of owner occupation may be reduced or enhanced by further investment A building extension or major renovation may boost the market value of a dwelling or constimte an additional cost of occupancy that detracts from price rises. For this reason alone, expenditure on the dwelling strucmre must be incorporated into any calculation of capital gains. Clearly, a person who purchased a dwelling in 1976 for S50,000, financed an extension to the value of $5,000 and sold that house after five years for 560,000 made a capital gain of 55,000, not 510,000. Any estimate of capital gains through the ownership of housing that has not included the value of additions has taken on board an unacceptable error. Secondly, addition and renovation work adds to the total pool of value within a district. On-going investment is necessary to maintain dwellings adequately, especially over the long term. Even higher levels of expenditure are required to upgrade an area. Put simply, the number and value of additions will affect profoundly the externality field within a residential precinct. A strong level of investment will contribute to the restoration of an area while the absence of additional construction activity may signal the decline of a precinct
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This section examines the nature and value of additions and renovations undertaken in the nine study areas. Special attention is paid to variations between the suburbs. The substantial differences in the age of the dwellings, the socio-economic status of the residents and the quality of the stock should have resulted Ln markedly different investment regimes. The literature on dwelling maintenance has suggested that the age of the structures will have been one of the most important influences on the level of expenditure. Recent research by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the South Australian Public Accounts Committee has identified peaks in expenditure around 30, 40, 50 and 60 years (in Beer and Paris, 1988, p 45). Almost all dwellings in the older suburbs of Forrest, Reid, Kingston, O'Connor and Narrabundah were within that range of years by 1981. Further, many of the dwellings constructed by the Federal Capital Commission or the Department of the Interior in suburbs of substantial prestige were, by the standards of today, small and of basic design. It is to be expected that the majority of these dwellings experienced wholesale renovations. Newer suburbs can also be expected to have required additional investment, though of a different nature and for different reasons. There are significant expenditures associated with establishing a new home: fences must be set, carports or garages erected and other smaU-scale changes effected. Although this investment involves modest sums with respect to the individual investment, in aggregate the apparent minutae of suburban life can be a powerful influence within the housing market. Households may also elect to add rooms to their current dwelling rather than move between dwellings (Seek, 1980).
The number of building permits issued varied noticeably between suburbs (Figure 6.7). Kambah and Weetangera had the greatest number of permits issued for all types of work, followed by Higgins and O'Connor. A signiflcandy different pattern of investment emerged when dwelling construction was excluded. O'Connor recorded the greatest number of permits, trailed by Higgins, Kambah, Narrabundah and Chifley. Kingston and Reid, had relatively low numbers of permits even allowing for their smaller size. Importandy, both O'Connor and Narrabundah experienced high levels of additional construction activity despite the fact that major construction ceased prior to 1962.
Differences in the rate of investment subsequent to construction stood out more clearly when the number of permits was divided by the number of dwellings in each suburb. Additions worth SI,000 or more were considered in order to separate out major and minor investment in the dwelling stock. Forrest had the greatest number of building permits per household, followed by Weetangera (Figure 6.8). Both suburbs are of high socio-economic status. There was litde difference in the number of building permits issued per household for the three remaining suburbs constructed after 1962. The rate of applications of all values for Kambah,