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Sunday, December 15th, 2019

Public land spruiked in Singapore

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by November 26, 2016 General

“Be dreamers. Be proud. Be home-owners.”

So urges a glossy brochure spruiking developer Lendlease’s​ new Atherstone Estate in Melbourne’s outer west.

Atherstone housing estate in Melton South. City's fringes are turning to Asian investors for a new stream of sales. Atherstone housing estate in Melton South. City’s fringes are turning to Asian investors for a new stream of sales. Photo: Joe Armao

Atherstone does indeed appear a well-planned neighbourhood, with orderly streets and wide footpaths, lovely parks and sporting fields galore; the ideal place to raise a family.

But so too, it seems, it is a perfect place to park your money if you’re a cashed-up foreign investor.

Atherstone housing estate under construction. Atherstone housing estate under construction. Photo: Joe Armao

Atherstone – a joint venture between Lendlease​ and Melton Council to develop 481 hectares of crown land in Melton South– is being promoted and sold to investors in Asia.

One ad in Singapore’s Straits Times newspaper this month spruiked “Melbourne Bungalows” in a “master-planned community” and – chillingly for those trying to get a toehold into the property market – is this line: “Invest before price increase”.

The sales pitch in Singapore reflects a small but apparently growing phenomenon: overseas investors – particularly from Singapore, Malaysia and China – shifting their focus from Melbourne’s over-supplied apartment market, to new residential development on Melbourne’s fringe.

The Melton South case is made especially sensitive by the fact that the land aggressively marketed in Singapore is, in part, publicly owned. Buy “freehold land direct from Victorian government from only $125,000”, says the newspaper ad.

Atherstone housing estate in Melton South. Atherstone housing estate in Melton South.  Photo: Joe Armao

The promotion promises a “rent guarantee of five per cent per annum for one year” and a “full turnkey three-bedroom and two-car garage at only $A323,000”.

Sale of public land to foreign investors is likely to fuel debate around foreign ownership more generally, housing affordability, and the opening of farmland on Melbourne’s fringe to urban sprawl.

Atherstone housing estate in Melton South. Atherstone housing estate in Melton South.  Photo: Joe Armao

The massive Aurora estate in Epping in Melbourne’s north – another former state site sold to Lendlease​ – has also been marketed internationally.

Australian property economist Peter Holland lives in Singapore and is a trustee of non-profit international research group, the Urban Land Institute.

A recent ad in Singapore's Straits Times. A recent ad in Singapore’s Straits Times. Photo: Supplied

He says ads for Australian house-and-land packages in Singaporean newspapers were now common, and that such investment was a trend developing over the last five years, “One thing which Australia has is land – it’s not scarce, which it is in Singapore,” he says.

National Australia Bank’s quarterly property survey points to a decline in foreign residential investment overall since 2014 but a shift in focus to house and land.

A senior property analyst who also asked not to be named said the trend to foreign investment on Melbourne’s fringe was now a “major” one.

The analyst said the slump in foreign interest in apartments had left an international promotions and sales “machine” now being utilised for this “second wave of [residential] investment”.

One prominent Australian developer, who also asked not to be named said new estates were increasingly sold into China, Singapore, South Korea and Vietnam. “It’s not just Melton, it’s everywhere”.

“There are a lot of builder-owners [doing it],” he said. “It has become quite simple for everybody to sell overseas – and the ultimate effect is driving up prices for everyone.”

Atherstone was rezoned in 2010, but had been made possible by the Brumby government’s dramatic extension of Melbourne’s urban growth boundary in 2008 – one of the biggest rezonings of farmland in Victoria’s history.

The move was justified in the name housing affordability. At Atherstone, the then planning minister Justin Madden promised that residents would “be able to live and work closer to home allowing them to spend more time with their families and be part of their communities”.

The Age asked Planning Minister Richard Wynne and Finance Minister Robin Scott (who handles sale of public land) about whether they had any concern about the sale of taxpayer-owned greenfield land to foreign investors – especially as Labor had rezoned the land originally.

Mr Scott did not reply, and Mr Wynne said overseas land sales were a matter for the Foreign Investment Review Board.

“Land rezoning,” Mr Wynne said, “is deliberately kept independent of sales and focuses on best long-term land use.”

Melton Council did not address questions about the appropriateness of newly released land being sold for overseas investment. Instead, Melton city corporate services manager Peter Bean described Atherstone as a “quality residential environment”. He said the council nurtured an “inclusive environment that welcomes residents and encourages them to become part of our robust and unique community”.

A Lendlease spokeswoman stressed that, to date, only a small number of the Atherstone homes had been sold to Asian buyers – less than 1 per cent. The estate is in an early stage of development.

David Davis, the opposition’s planning spokesman, said the overseas ads for the Atherstone estate highlighted Labor’s “hypocrisy” on housing affordability.

He said Labor’s former planning minister, Justin Madden, had rezoned the land from farmland to residential “trumpeting claims on housing affordability. Everyday Australian families face an affordability crisis,” he said, but “Labor’s previous actions [have] made this harder for some.”

Victorian Greens leader Greg Barber said the overseas sales created clear questions over Labor’s decision to rezone so much farmland. “Labor released this land on the urban fringe because they argued we had a shortage, and sprawling the city was the only solution. [So] why do they now need to look overseas to find buyers?”

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