A Question Of " Price " ?

As anyone who has dabbled in Real Estate will know, putting a price on a parcel of land depends on many factors.   Where is it  ?   Who wants it  ?  And what urgency is involved  ?

For well over twenty years the government has vacillated over selecting a site for Sydney's second airport. before finally settling on Badgery's Creek.  This is a project which will cost billions, including the road and rail connection and the surrounding infrastructure is expected to generate a vast industrial complex with many well paid jobs.

This airport project is now well advanced and in 2018 the government bought a 12.26 hectare parcel of land which was known as the " Leppington Triangle" because of its configuration.  We now learn that this land will form part of the second runway and is therefore critically important to the final outcome.

The government paid  the owners 29.8 million for the purchase, plus $3 million GST, but now the Auditor -General has seen fit to value it at just $3 million, and that has sparked a furore with claims of skullduggery by the civil servants involved in the purchase.  No less than four separate investigations into the purchase are under way and these include police involvement.

The land in question was owned by a millionaire family known to support the government with political donations. It was used as a dairy farm and was therefore undeveloped and mainly served as pasture for cows, and had the site not been selected for Sydney's western airport it would have eventually become a housing estate as Sydney spreads outward.

Many will question both the price the government paid and this valuation bestowed by the Auditor General. The government has the legal right to compulsory resume land needed for important infrastructure with the compensation settled by conciliation.   The question seems to be ?   Was the government buying a patch of cow paddock  ?    Or was it buying a piece of land forming part of an international airport  ?

The answer to that question has everything to do with the price paid !  Had that 12.26 hectares of land been in far western New South Wales, near the South Australian border it would be classed as " marginal grazing land " and near the Auditor General's valuation.

But it was the owner's good fortune that his long held dairy farm had by government fiat become an integral part of a new airport and its value had risen accordingly.  Should the government at some time in the future consider selling that airport to commercial interests they will most certainly want more than cow paddock prices for the land it is standing on.

As anybody who has has had recent experience of the Real Estate market would know, putting a price on property is as flexible as that old rhetorical question of "  How long is a piece of string "?