Friday, 29 May 2015

Land Banking

This is 82 Sussex Street. It last traded in 2003 for about $3 million. Today it is valued at between $11 million and $13 million. But it sits there. Empty. Abandoned. Prey to the elements. Prey to graffitists. Prey to squatters. Who would do this? Why would they do this?

Who would do this is not the point. Not really. They are an elderly couple who own about $100 million of property like this, all over the city. But WHY they do it is instructive.

Properties - usually land, but often commercial properties - are left vacant, while the value increases year upon year. Take 82 Sussex Street: from $3m to $13m in 12 years. That's about $830,000 pa. And the downside is the council rates.



William Kendall said...

Speculators. We have them here too. There's never enough money for them. And they've never heard of doing right in the community either.

Lynette said...

Sad post, all around. The answer, to me, is flat-out greed and self-centeredness.

Joan Elizabeth said...

Sometimes with heritage buildings it can take a very long time to create an approach that is agreeable to the council and makes financial sense for the developer.