From David Collyer at Prosper comes news that the Victorian Government will sell all of its growth corridor land holdings on the outskirts of Melbourne to a single buyer:
Places Victoria, a government agency that once competed with private land developers to limit their pricing power, is to sell all its remaining land holdings on Melbourne’s outskirts to a single buyer, the AFR reports today.
Rebecca Thistleton has Places Victoria acting chief executive Peter Seamer saying the decision to change the sale strategy was made to secure the highest possible return to the state.
What utter, utter garbage.
Selling its entire holdings in one line means only the biggest buyers with the deepest pockets can bid. Everyone else is excluded. Limiting the buyer pool in this way has two consequences.
Firstly, Victoria will get a lot less money – tens of millions less – for this valuable land than it would otherwise. Places Victoria wrote down the value of the land by $42 million in 2012. Sale on these terms means even the written-down valuation is unlikely to be met.
Secondly, selling these englobo estates to a single entity gives the buyer every incentive to withhold the land from the market with a view to driving up the price. The lucky winner also pays no State Land Tax following the dismal Napthine government decision to exempt undeveloped land in the Urban Growth Zone from this incentive to put land to its beast and highest use.
On offer are three aggregations in Craigieburn, Epping and Officer totalling 680 hectares. Originally, the three sites were to be offered to 28 developers. Their competition would have maximised the return to the state and pushed the land onto the market.
